Should Students File Annual Tax Returns?

On 04/07/2010, in Cash Management, by Jordan Wilson
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You must file a return if you owe the government taxes.

But even if you have no tax payable, it is usually a good idea to file a tax return.

This Financial Post article outlines benefits for Canadian students in filing annual returns.

I fully agree with the advantages noted and recommend that Canadian students read the story. It is also worth a review for non-Canadian students as some of the advice may also be applicable.

I understand that the Canadian Federation of Students has an agreement with UFile.ca, a Canadian on-line tax preparer. Under the arrangement, Canadian post-secondary students should be able to file their returns for free electronically. Please check this link for more information.

I also believe that many campuses offer tax clinics to assist students with their annual filings. So if you need some help, check around your local institution.

As I have written elsewhere, every dollar you can retain for yourself may be invested for the future. Or spent to service the BMW you bought. Take advantage of every legal way to minimize the money you pay in taxes each year or to maximize the refund you are entitled to receive.

I would note that there is a good reason as to why the government is friendly to student filers (as opposed to later in life). And that is to get you into the system. Once there you will be tracked for life. For any anarchists reading this, be forewarned.

For non-Canadian students, sorry, my tax expertise is limited.

However, if you have been employed during the year, it is likely that taxes have been withheld from your earnings. Given that most students do not earn enough annually so as to be required to pay any taxes, filing a return should allow you a refund.

Additionally, many countries offer registered retirement plans and refundable tax credits for low income filers. So please take a look at your country specific options (a quick google search using ” Country X, student, tax filing, advantages”) should provide some relevant advice.

You can also review the tax authority website for your country. There should be plenty of student-specific information listed there.

For American students, I would refer you to this article from the Daily Trojan, as well as this IRS website sub-section dealing with students.

Good luck getting a nice refund.

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