Students Must Keep Good Records

Peter Zloty - Aug 23, 2017

Baby boomers will remember how simple the world was when they were starting university. All costs were measured in hundreds of dollars. That is, annual tuition fees might be $500 or so. Textbooks, even in the most costly disciplines, would normally n

Baby boomers will remember how simple the world was when they were starting
university. All costs were measured in hundreds of dollars. That is, annual tuition
fees might be $500 or so. Textbooks, even in the most costly disciplines, would
normally not be any more. Room and board costs could be avoided by living
at home.

 

 

Not so today. For starters, typical tuition fees of $4,000 to
$10,000 are not uncommon, with some specialty faculties
charging considerably more.* And all other expenses are
higher. We did not have to buy fancy computers back in the
day, for example.


But we did not have Registered Education Savings Plans
(RESPs) back then, either. Indeed, RESP contribution limits
of $50,000 seem entirely fitting to today’s reality. If you don’t
have one in place for your children or grandchildren, get
started immediately to benefit from tax-sheltered growth
and government grants.


Beyond RESPs, today’s tax rules mean there are other
actions that students should take to save themselves (or
their parents) some money.

 

Keep Receipts — Receipts are important, in order to claim
tuition, education, and textbook allowances on federal tax
returns, or to transfer the credits to other family members,
if allowed.


Keep receipts as well for any moving expenses. Students
attending a distant post-secondary institution may be able to
deduct the costs of moving closer to their workplace for the
summer (even to home) under certain conditions. Note that
this provision also applies to non-students as well.


Students who use public transit to get to and from classes
should also keep their receipts for monthly or annual passes
when claiming the public transit tax credit.

 

 

File Tax Returns — Students having any kind of earned
income from summer or part-time jobs should be sure to
file tax returns, even if they don’t need to pay any income
tax immediately. The reasons: Earned income will result in
Registered Retirement Savings Plan (RRSP) contribution
room for the future. The credits will mean less tax will be
payable in some future year when they start to work full
time. Moreover, some of the tuition, education or textbook
allowances, or the tax credit available for student loans,
may be carried over to future years if not required to reduce
current income tax to zero.


*For the 2016/2017 academic year, the average undergraduate tuition fee was
$6,373, according to Statistics Canada.