Unused Tuition Tax Credits and Maximizing Tax Refund

[dasuperstar]

I got almost 25k of unused tuition tax credits. Could I refund them like student loan policy

Get a 15 percent tax credit on the interest you pay on your student loans each year.

The student loan tax credit allows you to deduct the interest that you pay on your student loans each year. This credit applies to interest payments you make on both your federal and provincial or territorial student loans, and the appropriate documents will be sent to you by mail for you to use when you file your taxes.

As per HR Block you only have 2 option

Students attending post-secondary education will receive a T2202A receipt from a registered institution for all eligible programs. This receipt will show tuition paid and will include the number of months the student was full time or part time which is used to calculate the education credit.

This tuition and education receipt is then reported on your tax return and will be used to reduce the taxes you owe. Since most students don’t have a large income, you may not need all of your credits. There are two options for the unused amount. A portion may be transferred to a parent, grandparent, or spouse, but only in the year the receipt is issued. The decision to transfer is made by the student and you need to make sure you sign the back of your T2202A to acknowledge the transfer.

Students can also carry forward the unused credits to be used in future years. This can be handy once you start on your career and are earning a higher income since the carry forward credits can be used to reduce your tax payable.

Hopefully I could get a credit back So far I already have 2k refund for sure I need some more... any suggestion guys how could I maximize my refund

How about this

TaxTips.ca - Canada employment amount

could I get a refund?

[tiger_handheld]

Carry forward or transfer to parents amounts are you only choices. What do you mean by student loan credit??!?

What is the question on Canada employment amount?


Vague post is Vague!

[Iceman-19]

I believe I have some unused school credits from a couple years ago, how do I figure out how much I have available?
Posted via RS Mobile

[dasuperstar]

Originally Posted by tiger_handheld

Carry forward or transfer to parents amounts are you only choices. What do you mean by student loan credit??!?

What is the question on Canada employment amount?


Vague post is Vague!

Student Loan Credit

Get a 15 percent tax credit on the interest you pay on your student loans each year.

Could I get a refund? For example I got 1k worth of paid student loan interest. Would I get $150 back or it will add again on my credits

Could I avail the Canada employment amount? Is it credit or refund?

Thanks

[TurboFC3S]

I used my tuition tax credits this year. Bumped my tax return from $2600 to $3500 Was super happy about that! Finally deducted lots of things this year too... Dentist bills, prescriptions, rrsp's, and stuff i required for jobs that work didnt pay for etc (like all the things i needed to pay when applying / getting my security licence which i no longer work in but w/e lol )

[tiger_handheld]

Originally Posted by Iceman-19

I believe I have some unused school credits from a couple years ago, how do I figure out how much I have available?
Posted via RS Mobile

Look at 2010 Notice of Assesment - it should say how much Fed / Prov tuition credits you have carried forward(if any).

Originally Posted by Plush

Student Loan Credit

Get a 15 percent tax credit on the interest you pay on your student loans each year.

Could I get a refund? For example I got 1k worth of paid student loan interest. Would I get $150 back or it will add again on my credits

Could I avail the Canada employment amount? Is it credit or refund?

Thanks

If you worked in Canada , you will qualify for the Canada employment amount. As far as I know there is no restrictions like the Working Income Tax Benefit.

Yes, Student loan interest will provide you a credit. Which will then work to decrease your taxes payable (if any) to bring your payable to 0 and in conjunction with other credits provide a refund.

Pro Tips by:
D & G Consulting
Accounting | Tax | Strategy

[tiger_handheld]

Originally Posted by TurboFC3S

I used my tuition tax credits this year. Bumped my tax return from $2600 to $3500 Was super happy about that! Finally deducted lots of things this year too... Dentist bills, prescriptions, rrsp's, and stuff i required for jobs that work didnt pay for etc (like all the things i needed to pay when applying / getting my security licence which i no longer work in but w/e lol )

It was the other crap that made your refund so high. The tuition tax credit will bring your taxes payable to 0 and will automatically be carried over if there is any left over...

If you want to try it, remove all the other crap and see

[dasuperstar]

Originally Posted by tiger_handheld

It was the other crap that made your refund so high. The tuition tax credit will bring your taxes payable to 0 and will automatically be carried over if there is any left over...

If you want to try it, remove all the other crap and see

What other crap.... maybe I could add those as well

Thanks

[TurboFC3S]

Originally Posted by Plush

What other crap.... maybe I could add those as well

Thanks

I brought all this stuff to my accountant..

-T4's obcourse
-A slip from my union showing Over 2G in union dues i paid (they are write-off-able lol)
-Dentist bill
-All my prescriptions
-RRSP's
-All costs associated with getting my security workers license (fingerprinting, BST course fee, crim rec check, licence application fee, first aid course)

If u got simular stuff you can see if it makes a difference..

[tiger_handheld]

Other crap for the average joe
- bus passes
- out of pocket medical expenses
- rrsp's
- investment carrying costs (interest , acct fees)
- safe deposit box costs

I tell my clients to bring everything they think is deductible and i'll be the one to say yay or nay. Some people have tried to claim clothing for working at retail, but the clothes were from another brand =\

[dasuperstar]

removed

[TheNewGirl]

You can keep using them up for years and years to come. Also be mindful that some of that is provincial, some of it is federal and it only applies to the appropriate portion of your income tax. For example, I ran out of provincial loan credits years ago but it took me 5 years to run down all my federal ones.

You also can't get more refund than you paid into taxes, so you're often best served by holding your credits for years in which you have higher than normal earnings when you can afford to.

[bobbinka]

Originally Posted by TheNewGirl

You can keep using them up for years and years to come. Also be mindful that some of that is provincial, some of it is federal and it only applies to the appropriate portion of your income tax. For example, I ran out of provincial loan credits years ago but it took me 5 years to run down all my federal ones.

You also can't get more refund than you paid into taxes, so you're often best served by holding your credits for years in which you have higher than normal earnings when you can afford to.

Your tuition credits are automatically used in the immediate years where needed. Contrary to what many people think, you do not actually get to 'hold on to them' and decide when to use them. Tuition credits are one of the few things that CRA automatically adjusts for your benefit.

For the guy asking how to figure out your carry over amounts, if you don't have your previous year's notice of assessment, you can call CRA at 1800-959-8281 to find out.

[dasuperstar]

I got my refund through H&R Block. I got 5.5k Total Refund

Actually you could use your tuition credits to maximize your refund.

[bobbinka]

You're merely getting back the tax that was withheld from your paychecks. Since your tuition credits reduce the amount of taxes you owe, you get back what was originally withheld.

But at this point, I'm sure you only care about how much you're recieving and not the mechanics behind it

Share the wealth!
Posted via RS Mobile

[dasuperstar]

Originally Posted by bobbinka

You're merely getting back the tax that was withheld from your paychecks. Since your tuition credits reduce the amount of taxes you owe, you get back what was originally withheld.

But at this point, I'm sure you only care about how much you're recieving and not the mechanics behind it

Share the wealth!
Posted via RS Mobile

I know what you mean about share the wealth. I could give some of my credits to my parents.... im so greed T_T. BTW could you explain this one more further "You're merely getting back the tax that was withheld from your paychecks." I did use most of my school credit. Do you think in the long run its much better to have some of it left?

Thanks again

[bobbinka]

Originally Posted by Plush

I know what you mean about share the wealth. I could give some of my credits to my parents.... im so greed T_T. BTW could you explain this one more further "You're merely getting back the tax that was withheld from your paychecks." I did use most of my school credit. Do you think in the long run its much better to have some of it left?

Thanks again

LOL! No, that's absolutely not what I meant. I meant share your refund with the rest of us, lol!

Every paycheck you get (assuming you are an employee), tax is deducted. However, this is an estimated amount, as the government has no way of knowing how much tax you should actually pay until the end of the year, hence your tax return. So if at the end of the year, we calculate that you owe (let's say) 5000 in taxes, and the total of all the tax withheld from each paycheck throughout the year amounts to 5000, then you don't need to pay anything additional. If too much was withheld, you get a refund, and if too little was withheld, you owe.

fortunately, tax credits exist to help us reduce the amount of taxes we owe. One of those being the tuition amounts. So, again, let's say we calculate you owe 5000 in taxes based on your income, but the tax withheld throughout the year already amounted to 5000. Well, now your tuition credits reduce the 5000 of taxes you owe to (let's say) 0. The amount of taxes that was withheld, then, no longer needs to be withheld. As such, you get refunded that amount.

So you see, you are merely getting back money that was yours to begin with. If your employers never withheld taxes from your paychecks, then when you filed your return at The end of the year, you would have gotten nothing back, cause the tuition credits only reduce your taxes to 0, and not give you more than that.

It's always nice to have tuition credits carry forward, as they will help you reduce taxes. But as I mentioned before, you dont get to choose when to apply them towards your taxes, CRA will automatically do it for you.
Posted via RS Mobile

[bigzz786786]

i have a question, last year i paid 7300 for tuition but did not have an income last year

this year i got hired, so does the 7300 get carried over to my 2012 tax returns?

thanks

[bobbinka]

Yes, they get carried forward until you need them.

So if in 2012 you earn income and only 2300 of the tuition credits need to be used, the other 5000 will continue to carry forward
Posted via RS Mobile

[dasuperstar]

@bobbinka

SO basically I got 10k BC and 15k National tuition credits. Without using them I do have a $ 1,800 refund. The guy on H&R Block used all of my tuition credits thus giving me another 3k extra refund. IDK why they do it but do you think its a good move OR

is it related to this

It's always nice to have tuition credits carry forward, as they will help you reduce taxes. But as I mentioned before, you dont get to choose when to apply them towards your taxes, CRA will automatically do it for you.

What do you mean about CRA will automatically do it for you?

Thanks

[tiger_handheld]

^ your taxes are calculated in such way that tuition credits are given priority to reduce your taxes payable. They will NOT increase your refund. The refund was increased by claiming full amounts of other credits/deductions (donations,medical,rrsp etc). If you expect to be in a higher tax bracket next year and beyond, it was not a wise move; however, if you think the salary you made is the highest you will ever make - then it was a good move.

These are the types of decisions/critical thinking methods that differentiate a $100/hr accountant vs. data entry guy from HR Block.

As for tuition credits. Lets assume you have 10k federal and 10k provincial. you need 5k fed and 5k provincial to make your taxes payable to 0.00. the remaining 5/5 will be considered "unused" and be carried forward to next year. This is an "automatic" calculation done using tax software. You are not able to over-ride it. The only control you have is to give upto 5k of unused tuition to prarent or spouse.

[dasuperstar]

Originally Posted by tiger_handheld

^ your taxes are calculated in such way that tuition credits are given priority to reduce your taxes payable. They will NOT increase your refund. The refund was increased by claiming full amounts of other credits/deductions (donations,medical,rrsp etc). If you expect to be in a higher tax bracket next year and beyond, it was not a wise move; however, if you think the salary you made is the highest you will ever make - then it was a good move.

These are the types of decisions/critical thinking methods that differentiate a $100/hr accountant vs. data entry guy from HR Block.

As for tuition credits. Lets assume you have 10k federal and 10k provincial. you need 5k fed and 5k provincial to make your taxes payable to 0.00. the remaining 5/5 will be considered "unused" and be carried forward to next year. This is an "automatic" calculation done using tax software. You are not able to over-ride it. The only control you have is to give upto 5k of unused tuition to prarent or spouse.

Weird... IDK how H&R block applied the whole amount of my tuition credits.
MY Tax Payable this year is 7,147 however my company tax me like 9K. In this I already have a guarantee refund. The fellow on H&R Block MAX the box where you could put your tuition credits. He input 10k and 15k tuition credits.

Do you guys think his doing it wrong? If so is it better for me to have them review it again I guess.... What is the worst thing will happen if they did it wrong.

BTW to answer your question yes definitely I will have lots of credit next year since hopefully I will buy a house and yes my tax bracket would be the same.

Thanks

[bobbinka]

Its neither a good or bad move, because you can't decide when to use them. Even if you don't make the claim, CRA will adjust your return to make the claim. Meaning you HAVE to use them if it is needed.

You're getting more back because Your payable is reduced.

How it works:
1. Calculate your income
2. Calculate your total taxes based on your income
3. Reduce amount of taxes payable by credits such as tuition
4. Give you back excess money originally withheld from your paychecks for tax purposes
Posted via RS Mobile

[dasuperstar]

Originally Posted by bobbinka

Its neither a good or bad move, because you can't decide when to use them. Even if you don't make the claim, CRA will adjust your return to make the claim. Meaning you HAVE to use them if it is needed.

You're getting more back because Your payable is reduced.

How it works:
1. Calculate your income
2. Calculate your total taxes based on your income
3. Reduce amount of taxes payable by credits such as tuition
4. Give you back excess money originally withheld from your paychecks for tax purposes
Posted via RS Mobile

In my case it is not needed but as per H&R Block If I want more refund I could Max my tuition amount since I will have more credits next year. BTW could you actually max your tuition amount? Could you request CRA to audit your tax since H&R block has the guarantee?

I called H&R block regarding this and they told me to relax since they are professional that they know what they are doing + the aid of their tax software. When I use Turbo Tax free online assessment it provide me a flag when I put max tuition credits

In addition I think this is what happened to me

3. Reduce amount of taxes payable by credits such as tuition

use all the credits and get a good refund

I'm confused now

[bobbinka]

You can't just use all your credits and get a huge refund because the credits only help reduce your tax payable to 0. Thus, you only get back the amounts withheld during the year.
Posted via RS Mobile