So it only makes sense that your summer job should pay off in every way possible. Here are some financial planning tips for getting the most from your summer employment cash*.
Give yourself all the credit Tax credits directly reduce the actual amount of your federal taxes and, in many cases, your provincial taxes, as well. As a student, you are eligible for these credits:
- The Canadian Employment Credit on the first $1,000 of your employment income.
- Tuition, Education and Textbook credits for tuition fees of more than $100 per year, for education costs of up to $400 for each month of enrolment for full-time students (or part-time students with a disability) and $120 a month for part-time students, and textbook costs to a total of $65 a month for full-time students and $20 a month for part-time students.
- A Public Transit Pass Credit for monthly or longer transit passes. You will need receipts to make this claim.
- Moving expenses – when you move more than 40 kilometres to be closer to school or for your summer job.
- Child care expenses – can be claimed by a higher-earning spouse or common-law partner when the lower income partner is enrolled in a qualifying secondary or post-secondary program.
Save for emergencies … and your future You can contribute up to $5,000 to a Tax Free Savings Account (TFSA) each tax year. Your contribution isn’t tax deductible but money and interest inside a TFSA is tax-free and so are withdrawals, which can be made at any time for any purpose – such as providing emergency cash for unexpected education costs.
Find out about even more tax-saving strategies by talking to a professional advisor.
* Information in this article is based on federal rules only. Provincial and territorial rules may differ.