CANADIAN Tax Questions (Ontario To Be Specific)

[Terinox]

Okay, I'm so stupid, i've been thinking of who I could talk to about taxes and shit like that, when I realized there must be tons of people online here that know their shit. Monster, I remember you said you were into accounting or something, and knew a lot about tax stuff?!

Anywho, here is the question, I'm a university student, and I need to know HOW much money can I make in total WITHOUT getting taxed on it? I read something about tax exemption if it is UNDER $7500 (or there abouts). They ARE currently raping taxes off of my weekly paychecks (about $50 bux), but I need to know whether I will be able to claim ALL of it back in my 2004 taxes. Yes, this is my first real job, so I don't know jack shit about how the "system" works.

Also, my job is a 35km drive, total of about 70km, will I be able to claim gas expenses on my taxes as well?! I don't know if this applies for summer job students as well, I know for others who have perm. jobs can do this, but can I also?

I REALLY need to know this info, because I wanna be careful, and NOT make too much money (if I can claim it all back), I'm getting lots of overtime, and if I CAN actually claim all my taxes back (if i make under 7500 or so) then I will quite the job sooner (if I make that much).

Let me know, anyone,
Thnx

[chicamahomico]

Q1) HOW much money can I make in total WITHOUT getting taxed on it?

A1) There are two different levels of tax. Provincial and federal. Your tax ceiling will be different for each of these mostly because of your status as a student. I'll give you an example of how my tax ceiling(federal) is calculated:

-personal tax credit( everyone gets this, its the basic amount you can make without payiong income tax ) ~7700.

-university student credit( tuition and cost of living amount, not books ) tuition 4000 + 400( full time study, 200 part time study ) * number of months in university ( normal two semester year is 8 ).

-so you have 7700 + 4000 + 3200 = ~15000 that I can make before having to pay federal income tax. It is likely that you will be able to get it all back when you file next year but why pay it in the first place?

Q2) Also, my job is a 35km drive, total of about 70km, will I be able to claim gas expenses on my taxes as well?

A2) No. Not unless you are self employed.

PM if you have more questions or if my explanations are a lil fuzzy.

[Money Boss Hustla]

It sounds like you have claimed the basic amount for payroll purposes. If this bugs you then my advice to you is to defer paying taxes until tax time (April 04). Talk to someone in the payroll department and have them stop withholding your taxes for the government. As a FT student you should have enough tax credits (as well as the basic personal tax credits) to balance out the taxes owing. However, if you are doing excessive amounts of OT I would keep an eye on your gross income level as you may end up paying the government for taxes owing.

My personal opinion in all of this is...why make your taxes a hassle for minimal amounts of money and secondly DO NOT quit your job to avoid taxes. It is financially beneficial for you to keep working regardless of the amount of tax being taken off your cheque. You cannot claim your full tax credits without the income to match it. So the more money you make during the summer the more tax credits you can use…other wise the educational tax credits will be carried forwarded. When I was a student I looked forward to getting back a refund in the spring. Think of it as a saving plan to buy AS.

Chicamahomico is correct on the formulation of your tuition tax credits and he is correct when he says that you cannot claim fuel expense. To be exact PT student is $124 and FT student is $414 times the numbers of months in school. Your non-refundable tax credit is $7,686 in Ontario. You will also get a $100 basic sales tax credit (Ont tax credit) but through the taxation process you only get $24 of it if you make ~$7800. All in all...if you make $7800 and pay absolutely no taxes, do not claim tuition, etc. you will have to pay $2.56 in taxes come tax time (Federal tax owing of $26.56 and Provincial tax credits of $24).

It’s hard to spout numbers for taxation references as most of the taxation process is based on formulas and percentages of your income. I can crunch some numbers for you if you want...but I would work as much as possible and worry about the taxes later.

[Terinox]

Thanks for the replies guys, but I'm a bit confused.

What did you mean by why are you even paying taxes? They take it out of my bill, there is nothing I can do about this. My friend is in the same situation, they took taxes off of him, but then come tax time, he got ALMOST all of it back, but that's because he worked the entire year, and made a lot more money. For me it's different, I will ONLY be working summer, so either way, i'm gonna end up stopping/quiting the job in September. Currently I am NOT in school, so does that affect the taxes?

When I filled out the tax papers when applying for the job, I DID see at the top it said something about "Tax exemptions" which was about $7700 for Provincial, and like $7600 for Federal, or there abouts. So, you mean that this "exemption" they gave does NOT include the amount I should add extra myself for being univ. student? I mean, if I can make up to 15k, and get ALL my taxes back, then heck I'll work even more hours, and try to hit 50 hours everyweek.

Am I getting it right? I mean is that all there is to know? It sounded a bit confusing the way you talked about it.

[Money Boss Hustla]

Thanks for the replies guys, but I'm a bit confused.

What did you mean by why are you even paying taxes? They take it out of my bill, there is nothing I can do about this. My friend is in the same situation, they took taxes off of him, but then come tax time, he got ALMOST all of it back, but that's because he worked the entire year, and made a lot more money. For me it's different, I will ONLY be working summer, so either way, i'm gonna end up stopping/quiting the job in September. Currently I am NOT in school, so does that affect the taxes?

When I filled out the tax papers when applying for the job, I DID see at the top it said something about "Tax exemptions" which was about $7700 for Provincial, and like $7600 for Federal, or there abouts. So, you mean that this "exemption" they gave does NOT include the amount I should add extra myself for being univ. student? I mean, if I can make up to 15k, and get ALL my taxes back, then heck I'll work even more hours, and try to hit 50 hours everyweek.

Am I getting it right? I mean is that all there is to know? It sounded a bit confusing the way you talked about it.

Technically you do not have to pay taxes from each cheque. You can ask payroll to stop doing that...they may refuse your request as it will create more work for them if they are using a payroll outsource.

Now let's make this easy...forget about taxes and make as much money as you can. Period. Focus on revenue...not tax.

[ECKO 747]

I would call your local H&R Block... They usally give free advice

[chicamahomico]

When I asked why are you even paying taxes I kind of mean it like this: I assumed you are a full time (3 or more courses per semester minimum )student for a normal university year( 8 months ). So you have 4 months off in the summer in which you will most likely earn the bulk of your annual income. 4 months is probably too lottle time for the average summer student to make ~15000( about the amount an average university student should be able to make before paying income tax ) unless you are rig pigging it up north for the summer.

[chicamahomico]

I would call your local H&R Block... They usally give free advice

Oh yeah, do this for sure. You can have your taxes done for $25-35 assuming a simple return.

[Terinox]

I would call your local H&R Block... They usally give free advice

Really? That's a good idea, I might give that a try Thnx

[Money Boss Hustla]

I would call your local H&R Block... They usally give free advice

If it would make you feel better it wouldn't hurt to call them...but just for the record I have my B.Comm and am a professional accountant so you're getting free advice now. Like I said if you want to crunch some numbers just let me know.

[Terinox]

If it would make you feel better it wouldn't hurt to call them...but just for the record I have my B.Comm and am a professional accountant so you're getting free advice now. Like I said if you want to crunch some numbers just let me know.

Even better I'll try to figure out what I need to know and want to ask, and I'll shoot you a PM

Thnx