Tax season for students: What to do and why you should care

It’s that dreadful time of the year — tax season. 

As much as it can be a pain, it’s important to file your taxes to either claim as much money as you can, or to minimize how much you owe to the Canada Revenue Agency. 

This is a general overview of tax-relevant information for students filing taxes for the 2022 fiscal year. Please note this information may not be applicable to all students. For advice specific to your own taxes, consult a professional.

Why should I file?

Filing taxes can have tangible benefits such as refunds or positive contributions towards your later life.

“The most obvious reason a student should file a return is if they paid taxes on any income earned throughout 2022, there is a good chance they can receive some or all of that income back in the form of a tax refund,” says management and organizational studies professor Barry Hawn. 

“Between the Basic Personal Amount Credit and the tuition credit, students will likely owe little or no actual income tax. Some or all of the taxes deducted from their pay cheques throughout the year could be returned to them in the form of a refund.”

The Basic Personal Amount Credit is a non-refundable tax credit that can be claimed by all Canadians to reduce their taxable income, lowering your tax owing.

Filing also makes you eligible for the GST and HST credit, which is a tax-free payment of $467 per year for Canadian residents over the age of 19. It also makes you eligible for the tax-free Climate Action Incentive Payment of $488, which is a government rebate to offset the cost of the federal pollution pricing.

Do I have to? 

Even if you don’t want to file your taxes, you may be legally required to. 

Canadians must file a return if they owe taxes to the CRA, are self-employed, have to pay their Canada Pension Plan or Employment Insurance premiums — which is if they sold capital property like real estate or stocks — or if the CRA has requested so. 

But even if you aren’t required to, filing taxes can be an educational experience.

“Now is a great time for a student to learn how to complete their return so they know how to do it when they start working full-time and their return likely becomes more complicated,” says Hawn. “If students have their parents or a professional service prepare their return, they should take the time to have someone go through it with them to show them how it works. It isn’t as complicated as it first appears.”

Even if you don’t care to learn, or don’t have the time to learn, you may thank yourself in the future for filing now — even if it’s a small one.

“Everyone in Canada can build RRSP contribution room when they file a tax return and have earned income derived from a job, self-employment or a rental property,” says Hawn. “Students should file a tax return to report any income — no matter how small — to generate RRSP contribution room. The room carries forward throughout the student’s life until 71, so even though most students don’t open an RRSP until they begin their careers, it’s valuable to begin creating the room now.”

How do I file?

Students can find their tax documents from Western University under “Student Financials” on the Student Center. There you can find tuition receipts, charitable donations and income from scholarships or bursaries. Students also need a Social Insurance Number and may also be required to go to their bank or employer to find the remaining necessary documents.