income tax clinic - mcgill university › studentaid › files › studentaid ›...
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Income Tax Clinic
Lynn Bennett, BComm, PMP
GD Finance, GC Financial Planning
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Scholarships and Student Aid Officewww.mcgill.ca/studentaid
Offers advice on financial matters including
Budgeting
Debt management
Loan repayment
Administers 13 government aid programs
Help students determining their government aid jurisdiction
Administers University need-based programs
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Frugal Scholar Money Management Pgm
Created for student by students
Promote mindful spending habits
Special events and workshops in the fall and winter
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TAX Guides Available
Free paper copies for 2015
CANADA (CRA) – at POST OFFICE
QUEBEC (Revenu Quebec) – at DESJARDINS BANK
Online & Telephone Support:
CRA http://www.cra-arc.gc.ca
Revenu Québec http://www.revenuquebec.ca
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TAX TIP – Guides for Students
Studentshttp://www.cra-arc.gc.ca/students/
Out of Province Studentshttp://www.revenuquebec.ca/en/citoyen/situation/nouvel-arrivant/default.aspx
International Studentshttp://www.cra-arc.gc.ca/internationalstudents/
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Tax Filing 2015, Step-by-Step
1. Determine your RESIDENCY for TAX PURPOSES
2. Gather tax documents (Employment, tuition,public transit, moving, medical, banking, etc.)
3. Enter data for Income, Deductions & Credits
Result $$$: Refund or Pay ?
4. Submit Tax Return to CRA & RevQC by April 30
5. Receive Tax Assessment from CRA & RevQC
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Common Income for Students
Scholarships / Bursaries (usually, non-taxable)
Research Grants (usually employment income)
Employment income (salary, commissions,tips, bonuses)
Self-employment income
RESP withdrawals
Investment Income (Interest, Dividends, etc.)
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Common Tax Documents for Students
TAX FORMS & RECEIPTS to keep
• T22021 & RL-8, Tuition & Months of Study
• T4A & RL-1, Scholarships, Bursaries & OtherIncome
• T4 & RL-1, Employment Income
• RL-31, Solidarity Credit, Housing
• Public Transit receipt (STM)
• Moving expenses receipts
• Medical expenses receipts
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Potential Deductions from IncomeFor Students
Moving Expenses, if eligible(carry forward avail)http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/219/menu-eng.html, CA Line 219http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/revenu-net/ligne228.aspx, QC Line 228
Child Care Expenses, if eligible(carry forward not avail)
Professional membership & Union fees
Foreign researchers & specialists, if eligiblehttp://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/revenu-imposable/ligne297/point05.aspx
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Non-Refundable Credits - For Students
Tuition
Education
TextbooksTax forms : T2202A & RL-8
- Transferable, all or part, to 1 of:Parent / Grandparent / Spouse
OR
- Carry forward to FUTURE tax year with taxpayable
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Non-Refundable Credits - For Students
Student Loan Interest paid
- Carry forward for 5 years
- Only student can claim this credit
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Non-Refundable Credits – For Anyone
Basic Personal Amount, ~$11,300 Living alone (QC)http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/ligne361.aspx
Public Transithttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/364/lgblty-eng.html
Medical Expenseshttp://www.cra-arc.gc.ca/medical/
http://www.revenuquebec.ca/en/citoyen/credits/frais_med/
Canada Employment Amounthttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/363-eng.html
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Non-Refundable Credits – For Anyone
Charitable Donations
1st-Time Donor's Super Credit
1st Home buyer, $5000
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Non-Refundable Credits
For Families
Spouse or partner
Eligible dependant
Single parent (QC)
Family Tax Cut (2014 & 2015)
Children's arts (2015)
Medical expenses: self, spouse & dependent children(3% x Net income, max $2208)
Caregiver for impaired dependent
Adoption expenses
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Other Non-Refundable Credits
Disability Credit
Volunteer Firefighter /Search and Rescue Volunteer, $3000
Political Contributions
Dividend Tax Credit
Investment Tax Credit
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Refundable Credits – Low Income
Low Income Taxpayers, including eligible students
GST/HST Tax Credit (CA)http://www.cra-arc.gc.ca/bnfts/gsthst/fq_qlfyng-eng.htmlhttp://www.cra-arc.gc.ca/bnfts/gsthst/menu-eng.html
Solidarity Tax Credit (QC)Note: You may still claim for 2013 & 2014!
http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/credit_impot_solidarite.aspx
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Tax Software – some are Free!
U-FILE http://www.ufile.ca/tips-and-tools/file-for-free
TURBO-TAX https://turbotax.community.intuit.ca/questions/1190102-
can-i-file-for-free-using-turbotax (free version except QC)
H & R BLOCK https://www.hrblock.ca/online-tax-software/product-
comparison/
__________________________________________________________________________________________________________________________
CRA-approved tax software http://www.cra-arc.gc.ca/esrvc-
srvce/tx/ndvdls/netfile-impotnet/crtfdsftwr/menu-eng.html
Volunteer Tax Prep Services in Montrealhttp://www.cra-arc.gc.ca/tx/ndvdls/vlntr/clncs/montreal-qc-eng.html
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CRA FAQ http://www.cra-arc.gc.ca/tx/ndvdls/fq/menu-eng.html
Income Tax and Benefit Guide 2015http://www.cra-arc.gc.ca/E/pub/tg/5000-g/5000g-15e.pdf
Do you have to file a return?http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/flng-blgtns/menu-eng.htmlhttp://www.cra-arc.gc.ca/E/pub/tg/5000-g/5000g-15e.pdf
GST/HST Credit – New Residents of Canada http://www.cra-arc.gc.ca/E/pbg/gf/rc151/rc151-15e.pdf
Students and Income Tax 2015 http://www.cra-arc.gc.ca/E/pub/tg/p105/p105-15e.pdf
Scholarships, fellowships, bursaries, study grantshttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/130/schlrshp-eng.html
Scholarship Exemption – Part-time enrolmenthttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/130/prttmdctn-eng.html
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International Students http://www.cra-arc.gc.ca/internationalstudents/
Are you an international student in Canada? http://www.cra-
arc.gc.ca/tx/nnrsdnts/ndvdls/ntl-eng.html
Determining Residence Status
CA Resident? http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-
eng.html
QC Resident? http://www.revenuquebec.ca/en/citoyen/situation/nouvel-
arrivant/ce-qu-il-faut-savoir/resident-et-liens.aspx
Ask the CRA !Submit an NR4 form for an opinion on your residency statushttp://www.cra-arc.gc.ca/E/pbg/tf/nr74/nr74-12e.pdf
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Information slips - T4 and others http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/slps/menu-eng.html
Working Income Tax Benefit http://www.cra-arc.gc.ca/bnfts/wtb/menu-eng.html
Canada Child Tax benefithttp://www.cra-arc.gc.ca/bnfts/cctb/menu-eng.html
Persons with DISABILITIES http://www.cra-arc.gc.ca/vdgllry/ndvdls/srs-txmsrs-pwd-lnks-eng.html
List of Tax Credits http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/menu-eng.html
RESPs http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/resp-reee/menu-eng.html
Medical Expenses http://www.cra-arc.gc.ca/medical/
Public Transit http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/364/lgblty-eng.html
Canada Employment Amount http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/363-eng.html
GST/HST Tax Credit (CA) http://www.cra-arc.gc.ca/bnfts/gsthst/fq_qlfyng-eng.html, http://www.cra-arc.gc.ca/bnfts/gsthst/menu-eng.html
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Registered Savings/Investment Accounts Approved by CRA:
TFSA / CÉLI - TAX-FREE SAVINGS ACCOUNThttp://www.cra-arc.gc.ca/gncy/bdgt/2015/qa14-eng.html
RESP / REÉÉ – REGISTERED EDUCATION SAVINGS PLANhttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/resp-reee/menu-eng.html
RRSP / REÉR – REGISTERED RETIREMENT SAVINGS PLANhttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html
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QC FAQ http://www.revenuquebec.ca/en/faq/default.aspx
QC Income Tax Guide http://www.revenuquebec.ca/documents/en/formulaires/tp/2015-12/tp-1.g-v(2015-12).pdf
QC Resident? http://www.revenuquebec.ca/en/citoyen/situation/nouvel-arrivant/ce-qu-il-faut-savoir/resident-et-liens.aspx
Tuition Tax Credithttp://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/ligne398.aspx Schedule T
Solidarity credithttp://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/credit_impot_solidarite.aspx
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Foreign researchers & specialistshttp://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/revenu-imposable/ligne297/point05.aspx
Moving Expenses
http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/revenu-net/ligne228.aspx
Living Alone
http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/ligne361.aspx
Tax Credit List http://www.revenuquebec.ca/en/citoyen/credits/
Medical Expenses
http://www.revenuquebec.ca/en/citoyen/credits/frais_med/
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TAX TIP – File your tax return!
“You must pay taxes. But there’s nolaw that says you gotta leave a tip.”
– Morgan Stanley advert
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Additional informationfollows…………
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Other Income Sources
Taxable capital gains
Business income
Rental income
Income from foreignsources
Employment Insurancepayments
Trust Income
Worker’s Compensationbenefits
Social services benefits
Universal Child CareBenefit (children < 6)
Support paymentsreceived
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Other Deductions to Income
Pension plan contributions
Deduction for Workers (QC)
Support payments made
Child care expenses
RSP contributions
Capital losses that offset capital gains
Business losses
Clergy Residence
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Canada Employment Amount(employment income)
CPP or QPP contributions
EI premiums
PPIP premiums
Non-Refundable Credits - For Workers
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Refundable Tax Credits
For Low Income Taxpayers
Working Income Tax Benefit
Medical Expenses Supplement (if eligible)CA Line 452http://www.revenuquebec.ca/en/citoyen/situation/faible_revenu/remb_maladie.aspx
QC Line 462http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/452-eng.html
For Families
Children’s fitness – (2015)
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Income, Deduction, Credit
Income – money you received from various sources,including foreign
Deduction – an amount you can subtract from Income,to calculate Taxable Income
Taxes Payable = Taxable Income x Tax Rate
Credit - an amount you can subtract from TaxesPayable, to calculate Refund or Pay
Types of Credit: Refundable and Non-refundable
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Taxable Income Example
Income
Less
Deductions
Equals
Taxable Income
$10,000
-
$2,000
_____
$8,000
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Taxes Payable Example
Taxable Income
X
Tax Rate
=
Federal TaxesPayable
$8,000
x
15%
_____
$1,200
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Now, Calculate Refund or Pay Amount
Subtract Taxes already paid:
• Payroll
• Instalments
Subtract:
• Tax Credits
• Quebec Abatement, 16.5% discount
RESULT : Refund or Pay?
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Refund or Pay? Example
Fed Taxes Payable
Less
Tax Paid already
Tax Credits
Equals
Refund or Pay
$1,200
-($1,500)
( $ 500)=
_____________________
Refund $800