Income Tax Clinic

Lynn Bennett, BComm, PMP

GD Finance, GC Financial Planning

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

Frugal Scholar Money Management Pgm

Created for student by students

Promote mindful spending habits

Special events and workshops in the fall and winter

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

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/

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

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.)

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

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

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

Non-Refundable Credits - For Students

Student Loan Interest paid

- Carry forward for 5 years

- Only student can claim this credit

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

Non-Refundable Credits – For Anyone

Charitable Donations

1st-Time Donor's Super Credit

1st Home buyer, $5000

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

Other Non-Refundable Credits

Disability Credit

Volunteer Firefighter /Search and Rescue Volunteer, $3000

Political Contributions

Dividend Tax Credit

Investment Tax Credit

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

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

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

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

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

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

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

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/

TAX TIP – File your tax return!

“You must pay taxes. But there’s nolaw that says you gotta leave a tip.”

– Morgan Stanley advert

Additional informationfollows…………

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

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

Canada Employment Amount(employment income)

CPP or QPP contributions

EI premiums

PPIP premiums

Non-Refundable Credits - For Workers

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)

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

Taxable Income Example

Income

Less

Deductions

Equals

Taxable Income

$10,000

-

$2,000

_____

$8,000

Taxes Payable Example

Taxable Income

X

Tax Rate

=

Federal TaxesPayable

$8,000

x

15%

_____

$1,200

Now, Calculate Refund or Pay Amount

Subtract Taxes already paid:

• Payroll

• Instalments

Subtract:

• Tax Credits

• Quebec Abatement, 16.5% discount

RESULT : Refund or Pay?

Refund or Pay? Example

Fed Taxes Payable

Less

Tax Paid already

Tax Credits

Equals

Refund or Pay

$1,200

-($1,500)

( $ 500)=

_____________________

Refund $800