The government has designed various tax benefit schemes for students falling in different categories in the current financial year. Whether you are a dependent or an independent earning student or if you are earning nothing or earning very less, you ought to know that the government has planned exemptions, deductions and grants for all. All you need to know is the category in which you belong.
Tax Plans for Adult students who have insignificant earnings
If a young adult is not having significant earnings, he can benefit from two sources: The federal GST/HST Tax Credit and The Government of Ontario’s Trillium Benefit.
The federal GST/HST Tax Credit starts when a student turns 19. He must register when he turns 18 and if he turns 19 before April 1st, he must file a return, when he turns 17. This will entitle him for a yearly payment of $268. The Government of Ontario’s Trillium Benefit starts at the age of 19 and pays you a total sum of $281, per year.
This adds up to a total of $549 per year. If you assume that you take 5 years to complete your education from 19 to 24 years of age, you will be paid $2745. So, even if you do not fall in the tax-payer category, you should file an income tax return as you may actually earn quite a decent amount of cash from IRS.
Tax Plans for Dependent Students
The dependent students who earn more than $6100 per year have to file a tax return on or before 15th April. The necessary documents comprise of the W-2 forms issued by the respective employer, form 1098-T by the school and if you paid loan interest, you will require form 1098-E.
The dependent student can either claim himself or his parents can claim him dependent if he has lived for than half a year with them and they have provided for half of his expenditures.
Exemptions and Reductions
Don’t forget to save your receipts of tuition, books and other stationery for coursework as the government has plans that deduct the tax return up to $2500 on these. The expenditure on room and travel however has nothing to do with tax deductions; they will be calculated as your gross incomes.
If you have earned less than $58000 per annum, you can file your tax return at the IRS’s official website online, as this will help you with identifying, identity theft. Read all the documents carefully and fill the form correctly.