With final exams, deadlines, and hanging out with friends, filing your taxes might seem like a distant concern. However, submitting a tax return is a valuable life skill — and usually means getting at least a few hundred dollars back from the Canada Revenue Agency (CRA).

How do taxes work, anyway?

Income tax forms the backbone of Canada’s revenue system, funding crucial infrastructure and services like healthcare, education, and national defense. The CRA administers this system, collecting income tax and ensuring its proper allocation. 

Students may be eligible for payments such as credits for paying Goods and Services Taxes (GST) and Harmonized Sales Taxes (HST), the Canada Child Benefit (CCB), and the Canada Carbon Rebate (CCR). On average, Canadians eligible for tax refunds received around $2,134 last year, highlighting the significant financial advantage properly filing taxes could represent for students navigating tight budgets. Most importantly, the GST/HST credit program extends payments four times a year, helping students manage the cost of taxes on essential purchases and improve cash flow.

Similarly, students are eligible for specific tax benefits that can substantially subsidize their daily and educational expenses. The federal tuition tax credit, for instance, allows students to claim eligible tuition fees and potentially reduce the tax they owe. These tax credits directly reduce your taxable income — the portion of your income subject to taxes.

For instance, when you pay for your postsecondary education, the government allows you to reduce the income tax you owe based on your tuition costs. If you’re a student earning a small income or none at all, you might think you can’t use this tax credit, but you can share this tax-saving opportunity with your parents, or grandparents, or you can save it for yourself for later, using it in future years when you start earning more money.

Understanding and utilizing tax credits and deductions specifically available to students can significantly reduce your tax bill or increase your refund. 

How do you file them?

In an email to The Varsity, a CRA spokesperson emphasized the importance of filing your taxes to receive benefits and credits you may be entitled to, encouraging students to file by the April 31 deadline, even if they have no income to report. With tools like My Account, an online portal through the CRA website to assist Canadians into managinge their tax affairs and files, and free electronic filing software like NETFILE available on Canada.ca, the process is streamlined for efficiency and ease. Be sure to check out the “Get ready to do your taxes” page on the Canada.ca website for comprehensive guidance.

Common mistakes among tax filers include not reporting all income, such aslike failing to report tips or income from short-term contracts, and not updating personal information. In their email, the CRA spokesperson stressed the importance of updating your personal information and keeping records organized to ensure you receive the correct benefits and credits without delay. Remember to report all sources of income, ensure your personal information is current, and maintain organized records of all financial documents. 

But with all of this information and with the end of the tax season approaching, it becomes tough to know where to start. Navigating the tax filing process requires understanding the aforementioned deductions and credits specifically available to students, such as for tuition fees, moving expenses, and the interest paid on student loans. The process involves gathering necessary documents like T4 slips, which are official statements summarizing the income paid by an employer to an employee within a calendar year. Additionally, students can obtain the T2202 form, available through ACORN, which provides proof of the tuition and education amounts they paid.

Filing your tax return annually also helps keep track of the tuition fees you’ve paid, which is crucial for leveraging the tuition tax credit.

Lucky for us, students and U of T community members can register for workshops offered by the UTM Students’ Union (UTMSU), the UTSC Students’ Union (SCSU), and the University of Toronto Students’’ Union (UTSU) at UTSG. The clinics provide free, personalized assistance by trained student volunteers. They collectively support hundreds of students each year with their tax returns, including international students who can and should file taxes in Canada, although, they are not able to help individuals with especially high yearly income — over $35,000 for the UTMSU and SCSU, and over $55,000 for the UTSU — or more complicated tax situations such as foreign income reporting. The St. George service, which is held at the Student Commons, provides specific guidelines on eligibility.

The clinic helps students navigate tax complexities and instills confidence and peace of mind, as evidenced by the positive feedback from its numerous beneficiaries. Beyond this, first-time filers can seek assistance from CRA services like the Community Volunteer Income Tax Program, or visit its ‘learn about your taxes’ to gain comprehensive insights into the tax filing process.

More so, tax filing platforms such as Wealthsimple and TurboTax significantly simplify the filing process for students, offering user-friendly interfaces and guidance tailored to their specific needs. These platforms can handle various tax situations, whether you’re an employee, self-employed, or a student with specific educational expenses to report. 

These services’ online software includes auto-fill options, a thorough search for applicable credits and deductions, and unlimited free access to all necessary tax forms. For those seeking professional oversight and willing to pay higher fees, these platforms also offer paid full-service assistance by tax experts who prepare and file your taxes for you. 

The earlier you file, the faster you can receive your benefits and credits or a refund if you are entitled to one.

What next?

To ensure a smooth tax filing process, students should stay vigilant against fraud by regularly checking their CRA account for discrepancies and never sharing personal tax information unless through a secure CRA-approved platform. The CRA will never demand payment through aggressive phone calls or texts nor ask for personal information via unsolicited messages.

To receive direct notices more securely and efficiently, students can update their home addresses with the CRA, and consider going paperless by signing up for email. If you are unsure about a contact claiming to be from the CRA, verify it through My Account or call 1-800-959-8281.

Seeking paid expert advice or using your studenttn union’s free tax clinic can provide personalized guidance tailored to your unique financial situation. Doing your due diligence and finding a tax filing approach that resonates with your personal preferences and circumstances is essential. This ensures not just compliance but also confidence in your financial decisions, whether that’s with the efficient and cost-effective do-it-yourself filing solutions or the sense of comfort and confidence you receive by paying a premium for an expert tax consultant.

Online tax filing for the 2023 year began on February 19. As the tax season remains underway, it’’s essential to mark your calendars for April 30 — the deadline for most Canadians to file their tax returns and make any payments they owe to the CRA.