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BUS 291 - Personal Finance Tax Filing (Doc)

   

Added on  2020-03-04

5 Pages1032 Words85 Views
Personal finance

Tax filing is a vital issue faced by Canadian students as they are not aware of the taxprovisions and its impact. Being a student, instead of relying on parents for tax filing, theyare required to take a proactive approach towards their tax obligations. In accordance with thestudy of Butrica (2015), irrespective of their age or income, they are required to file tax returnin order to attain various tax benefits1.According to the Canadian tax law; students have legal obligations to file their tax return ifthey satisfy any one of the following situations:They are required to pay tax for the yearThey have not made repayment of all amounts withdrawn from RRSP (registeredretirement savings plan) belong to lifelong learning planThey are required to make contribution in CPP (Canada Pension Plan)Students have received advance payments related to working income tax benefit(WITB)If one of the above described aspects is satisfied, then return can be filed by students bymaking use of NETFILE or EFILE or through the paper return. In the option of EFILE, theservice provider can complete and file the return on behalf of the student in against ofcharging a fee. On the other hand, in the option of NETFILE, the student has to complete andfile their tax return by making use of web application or tax preparation software2. Studentsare recommended to make use of NETFILE as it is easy and cost savvy process becausegenerally, they do not have complex tax transactions. By considering the tax norms of Canada; usually, the due date for filing tax is on or before30th April of the following year. In case if the student files their return after the due date, thenin such situation their credits and tax benefits (such as Canada child tax benefit payments andHST/GST credits) will be delayed3. These advantages are inclusive of payments certain fromthe territorial or provincial program. Along with this; they will be liable to pay the penaltyand interest charges for late filing.Provisions of Canadian taxation provides various benefits to students through which effectivefinancial planning can be done to save taxes by making use of available credits and allowableexpenses. Most of the student do part time jobs to finance their daily expenses and take a1 Butrica, Barbara A. "A Review of Children’s Savings Accounts." (2015).2 Malcolmson, Patrick, et al. The Canadian regime: An introduction to parliamentary government in Canada.University of Toronto Press, 2016.3 Lewis, Melinda, and William Elliott III. "Examining the Canadian Education Savings Program and itsimplications for Child Savings Account (CSA) Policy." Lawrence, KS: Assets and Education Initiative (2014).

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