Life after high school through a tax lens.
December 19, 2023
There’s no better time to learn about your taxes than while you’re a student. Your future likely feels a little uncertain, but filing your taxes is a sure thing. To start your tax journey on the right foot, we’ve rounded up a handful of unique tips, tricks, and credits available to you fresh out of high school.
Have you claimed your tuition?
Don’t let shelling out for tuition at the start of a new semester burst your bubble. The federal tuition tax credit is one of the top tax credits for post-secondary students. You can use this credit to claim eligible tuition fees you paid to take courses at school, for developing or improving your skills in an occupation, or for occupational, trade or professional exams. Make sure you keep your receipt and track down your T2202 certificate so you can prove how much tuition you paid for the year. If you don’t need the full amount this year, you can carry this credit forward or transfer it to a parent or grandparent to help them reduce their taxes.
Have you claimed your moving expenses?
If your bags are packed and you’re ready to fly the nest, be sure to claim your moving expenses during tax season. If you’re moving within Canada and more than 40 kilometres away from your previous home, you’re able to deduct eligible moving expenses from the employment or self-employment income you incurred at your new digs.
Did you receive a scholarship?
Your hard work in high school keeps paying off. Scholarships, awards, bursaries, and fellowships are generally not considered taxable income for full-time students (except in Quebec). The program length, conditions and terms of the scholarship, and the length of time of the financial award are all considered when deciding whether a scholarship is tax-exempt.
Learn the ABCs of your RRSPs, TFSAs, and FHSAs.
Utilizing tax deferred or tax friendly accounts as early as your 20s is a clever way to get a head start to a lifelong tax strategy. Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TSFAs) and First Home Savings Account (FHSAs) either defer or mitigate tax obligations in different ways that can have major benefits during tax season. New in 2023, the FSHA allows you to deduct contributions of up to $8,000 per year, and $40,000 over time – all while saving for your first home. Contributions to an RRSP lower your taxable income, while contributions to a TFSA or FSHA mean your investment can grow tax-free.
Are you a student with a disability?
It can be helpful to know that you may be eligible for financial help from the government. In Canada, resources vary from province to province, but you may also qualify for the Disability Tax Credit (DTC) – a non-refundable tax credit that reduces taxes owing for Canadians living with prolonged physical and mental impairments. This is one of the most important credits because it allows you to claim a federal maximum of $9,428 and opens the door to other federal and provincial programs. You can find more information on this important credit and others here.