When I did my taxes for the first time, I thought I’d need professional tax assistance to help me figure out what to do. In the end, it only took me an afternoon—plus a trip to the post office.
I’m willing to bet that filing your taxes is probably not the first thing that comes to mind when you think of fun things to do. If you’re filing for the first time this year, it can be especially overwhelming and confusing, and you might be tempted to put it off. I’m here to convince you, however, that the rewards of completing a tax return far outweigh the time you put into it.
Here are 6 reasons why it pays (quite literally) to file your taxes as a student.
Note: These tips are most helpful for domestic students. International students might find this section of the Student Services website to be a good starting point.
1. You probably won’t pay tax anyways
As a general rule of thumb, if you earned less than about $10,000 in 2017 from work, you won’t be paying any federal or provincial tax on your income. Any bursaries or scholarships you’ve received don’t get taxed as well.
2. Simply being a student gets you tax benefits
The tuition and the transit pass you pay for could get you tax credits that you can use to lower the amount of tax you pay on your earnings. If you have no tax to pay, you can “carry forward” these credits to use in future years when your income will be higher. But you can only get these credits down the road if you claim them now, so do your future self a favour and file a return.
3. You qualify for quarterly tax rebates
Since you’re not making much money, by filing your taxes you’ll be able to qualify for tax rebates—essentially free money—sent your way every 3 months from the government. These rebates help offset the taxes you pay throughout the year.
BC residents get rebates for the BC carbon tax and GST, which add up to about $400 a year. That'll cover your textbook costs for a term—or your latte budget for a whole year (though, as a Financial Wellness Peer, I should tell you that you'll save more by making coffee at home). Again, you’ll only get this benefit if you file a tax return.
4. You get to set yourself up for future happiness
Your reported income will help determine the amount of money you can put in a RRSP (a special account for your retirement). It’ll add up over time. Retirement is probably the last thing on your mind right now, but trust me: future-2068-you will be glad that savvy-2018-you filed that return!
5. You won’t be able to avoid taxes anyways!
You’re going to have to do your taxes one day. As you move on in life, you might even end up starting a family or buying a house—your taxes are only going to get more complicated! Might as well take the time to learn the basics now, and score some money out of it while you can.
6. It’s easier than ever to file
I found a site called simpletax.ca that made it super easy to file. Once my employer mailed me my T4 tax slip, all I had to do was copy the info into Simpletax, and the website filled out all the right boxes in my tax return for me.
When you file for the first time, Canada Revenue Agency (CRA) doesn’t have your info on file yet, so I had to print out a PDF copy and send it in the mail to my local tax office. After I mailed it out in March, it only took the CRA about a month to process it—I got my refund cheque before the April 30 filing deadline had even passed!
There are resources on campus that can help
It can be hard to know where to start, but once you gather your documents, it’s just a matter of filling in boxes in the right place! I suggest collecting all your tax slips in one place as soon as you receive them: they might be mailed to your home or be available through an online system. UBC Student Services has a good page on which tax forms you’ll want to start collecting first.
There’s lots of help available on campus too, including two free workshops in March that will help give you a headstart on your taxes, whether you’re a domestic or international student:
- Thursday, March 1: Filing Taxes - Why it's a Good Idea, hosted by Enrolment Services Professionals (ESP)
- Wednesday, March 7: TACS Teaches Tax, presented by the UBC Tax Assistance Clinic for Students
Your Enrolment Services Professional (ESP) can also direct you to helpful resources, including this Filing Taxes in Canada overview page. You can find their contact info on your Student Service Centre.
Taxes aren’t as taxing as you think
Doing a tax return is one of those classic “adulting” things, but it’s not something you have to figure out all by yourself! Utilize the resources available, and with just a couple hours of your time, you’ll be on the right track towards financial wellness for years to come.