Many students that are fresh out of school and starting their professional lives can be faced with immense student debt. This blog will highlight some tax strategies and credits that graduates can take advantage of.
• Tuition tax credit & education and textbook tax credits
This credit is available for textbook purchases and the full education amount. You can take advantage of this tuition credit by applying it to your present and future tax payable or transferring it to a spouse or family member.
Please note that the federal education and textbook tax credits are planned to be eliminated in 2017, but the tuition tax credit will still be available. Also, unused education and textbook credit amounts carried forward will still be available to be claimed in 2017 and later years.
• Student loan interest credit
As one of the non-refundable credits, this credit can only be used to reduce your tax payable but will not generate a refund. You are recommended to carry forward the interest credit claim if you have no tax payable in the current year. You can carry forward interest to any of the next five years.
• Public transit expenses
• Employment expenses
Expenses towards items deemed necessary for you to perform your job can be deducted from your tax return. Your employer must complete Form T2200 which is a statement of employment expense to be eligible.
