A new year is upon us, and that means it’s what we call in the accounting business “busy season.” Students, workers, and businesses all need to get their affairs in order to keep things legit with the Canada Revenue Agency (CRA). Much is changing, and below is a primer to get you updated with tax changes for the 2017 tax year.
The big change for students is the gutting of the education and textbook tax credit. Alas, 2016 was the last year you can claim this juicy cash-back that can save you up to $558. Unused credits from years prior to 2017 can be carried forward and claimed, so don’t leave them behind.
That credit was replaced by an increase to the low- and middle-income student grants. You can only qualify for these grants if you are eligible for federal student aid. So, even if you feel you may not need student loans, and are grinding at work to pay your way, there’s no shame in qualifying for a modest federal student loan. If you’re eligible for at least one dollar, you get the grant. It’s money you don’t have to pay back.
The BC government announced in its 2017 budget that the BC Education Tax Credit would end in 2018, but that budget did not pass. There has been no mention of slashing the tax credit in the latest budget announcement, so it may be safe, but this may be the last year you can claim it.
Hold on to your pitchforks, though; the BC NDP government wants to give students a break. After the Liberals slashed interest rates on the provincial portion of government student loans, the NDP said they plan to eliminate interest all together. This move will meet some opposition, so stay tuned for that.
Another simple way to save money: don’t pay anyone to file your tax return.
Unless you have a complex return—say, you run your own business, or have investment income—you won’t need a professional. SimpleTax is an example of free online software that is easy to use and should be sufficient for most students who just have a T4 from their job and a T2202A from school. Keep your T4 from your employer, grab the T2202A from Camlink, and fill in the blanks. Also, Camosun has the Community Volunteer Income Tax Program, where you can get your return filed free by Accounting students.
If you do have capital gains to report from all the cryptocurrency you bought after reading about them through this column, make sure you pay taxes on them. The CRA is still catching up to the craze, but they want their cut. Each trade of cryptocurrency for cash, or for another cryptocurrency, is considered a taxable event as if it were a barter transaction, and you must report capital gains as if they were a commodity.
If you became one of those cryptocurrency millionaires, laugh your way over to a professional for help filing your return.