The Days of Large Tax Refunds are Over

From 2010-2012, I was a full-time university student for at least a few months of each year. I don’t know much about how that changes things at tax time in the U.S. or around the world, but in Canada, your tuition is claimed (via your T2202A tax receipt) with your personal income tax return and can lead to a serious refund (a.k.a. cash back in your pocket!).

In 2010, I was a full-time student for 6 months, and my tax refund was:

2010 tax refund

In 2011, I was a full-time student for 12 months, so my tax refund went up to:

2011 tax refund

In 2012, I was only a full-time student for 6 months, so it went down to:

2012 tax refund

My 2011 and 2012 refunds went straight to debt: that’s $4,400+ that helped me wipe out more than 15% of what I originally owed. I’ve called those two tax refunds “the game changers” before, because that’s exactly what they were. And I knew I wouldn’t get anything close to that amount back this year, but I also wasn’t expecting to see this when I filed last week:

2013 tax refund

I know I shouldn’t complain about getting a $400+ refund; I’ll be putting every penny of that in my RRSP (to make up for what I couldn’t save this month), so it’s still being put to good use. It’s just hard to swallow the fact that my tuition credits are finally over and done with. (Yes, I even called CRA to double-check that I didn’t have any unused credits, haha.)

Have you filed your taxes yet? Are you getting a refund or will you owe money this year?

  • I would love that refund! My husband and I did a lot of freelance work this year, so we owe over $7k in taxes this year. The taxes are all done, I just don’t want to see my bank account balance plummet, so I haven’t submitted them yet.

    • Aww, I’m sorry, Rebecca. I guess that makes sense though. I doubt I’ll get a return next year, if I continue to do more freelance work this year.

  • I hear you! My return last year was a measly $35. At least I didn’t owe. But, I’ve now started saving $20 every month just for taxes, so if I owe, hopefully my budget won’t get screwed over. Still waiting for my T4 to see what this year brings…

    • That’s smart, Heather! I used to have an extra $20 taken off my paycheques, so I’d never owe at tax time.

  • I know – I am anticipating for that shoe to drop in two years time. I have a few large tax returns coming this year and next, but after that… well, I’ll be lucky to break even. Ah well, I suppose that’s the real world, rather than having thousands in tuition credits :)

    I haven’t filed because I haven’t gotten all my slips back. I’m hoping to get it done quickly so I can throw it at my debt similar to what you did.

  • We’ll be paying in this year….but I really don’t mind. Getting a refund means we gave our government an interest free loan. We do have to adjust some things to bring down the amount we pay in, but I’d like to see our refund/amount owed be as close to zero as possible.

      • This is exactly what my Dad told me. He said, you should get a refund or pay in as close to $0 as possible. That means you’re doing it right; you don’t want the government to hold your money and earn interest off of it, nor do you want to pay in.

        Just today a coworker confided in a few of us that her refund was OVER $5,000! The first thing that came out of my mouth was ‘you may be claiming the wrong deductions on your W-2s’.

        I got married this year and I’m in school part time – my husband and I walked away with a $950 refund. Pretty good (school helped that A LOT). It is all going to paying down debt.

        Thanks, Cait for being such an inspiration to put extra money towards paying down that pesky debt!

  • Same thing will happen to me this year! I used up all my tuition credits on the federal side last year (I still have some left on the Quebec side).

    I’m waiting for a T3/Schedule 16 mid-March and after that, I’m firing up the tax software! This year will also be the first year we file as a couple, this should be interesting. All in all I expect a refund, but I don’t really know of how much.

    • I was in the same boat, Jason – expected a refund, but wasn’t sure how much it would be. I was dreaming of $1,000… should’ve aimed a little lower. ;)

  • I’m going to be writing a blog post about this too in the next few weeks. My tuition tax credits are gone! Such a sad day. I’m going from gigantic tax returns to about $1,100 this year. :(

    Guess that means I’m officially an adult!

  • No Cait, we haven’t filed our 2013 tax returns yet (we still get some last minute prior year investment receipts in March of each year) but I do expect to get a refund this year. Having retired in late 2012 and later received my employer’s final profit sharing and stock bonus payments in 2013, in addition to my final RSP 2013 contribution I also included an extra $2000 in RSP contributions, representing the maximum lifetime eligible over-contribution that a Canadian can make. The expected refund from this combined contribution should nicely offset any 2013 taxes not paid (since by then I was retired and no longer paying any regular employer payroll deducted taxes). Going forward I have to now calculate my own annual taxes and put $$ aside to cover them. And so it goes…


    I actually thought I’d be getting a $5000 tax refund this year. The real number? $1000. freakin’ blog made too much money, so once I claimed that income, it ate up all the tax benefits I had from going back to school and contributing to my RRSP.

    Like you I’m glad I get something back… but I had seriously higher expectations.

  • I’ve already received my U.S. tax refund and was happily surprised to see it increase! Having bought a home in late 2012, I was able to deduct the interest paid on my mortgage for the first time. It definitely made a difference :)

  • Last year was actually the first year I had to file here in the U.S. and thanks to some freelance work basically cancelling out my taxed income, I think I got in total about $125 back from both the fed and state government. I’m really hoping for a more substantial return this year so I can upgrade my 7-year-old computer but I’m so nervous to see what that number comes out to!

  • I ran out of tuition credits a few years ago…wait until you just pray to not owe…my last refund was less than $100, but I was just relieved to get a refund!

  • We anticipate getting about $3000 in a tax refund this year because my husband is still in school so we can still get some tax credits for that. That money is going to pay for our plane tickets to England this summer for my sister’s wedding. Yay! Thank god for the tax refund because we had been struggling to save up enough.

  • A very similar thing happened to me, but it was with tuition carry-over. The first 3 years out of school I got huge tax returns – like $4,000 one year. And then all my tuition carry-over was gone and I got $140 last year – I’m expecting about the same this year. It’s better than owing money, but still sucks! :)

  • Oh I felt this type of tax pain before! The first year I didn’t have tuition to claim I owed $135 :( That thought my a valuable lesson, RSSPs are awesome!! Hopefully next year will be better!

  • I had to drop several thousand into RRSPs, which will result in a bit of a refund for me, I think around $1200. Spouse I think has to pay a few hundred. I can’t quite remember where the dust settled when we got our estimate from the accountant.
    My goal is always $0 or owing a few hundred, but I don’t have a ton of control over it anymore.

  • I live in the good ‘ol USA and even for us it stinks to get ALOT back from taxes…especially since that $$ isn’t being used correctly..I when hubby and I went and did our taxes and found out we are getting roughly $2,000 back..I am happy cause that is soooo totally going towards credit card BUT it sickens me that the gov holds on to that much for a year and does nothing with it…but owing a TON is not the answer either…I just dont know what the answer is.

  • Lol, yeah, that happens. About all you can do at this point is dump money into RRSPs, or take the occasional class at university. Either way, $400 is better than having to pay anything! I’ve done a once through on my taxes, but I haven’t hit submit yet. I’ll probably be doing that this weekend.

    • Yea, I’m already curious to see how my RRSP contributions will change things next year… anyway, guess we’ll have to wait another 12 months to see. Good luck w/ yours, dear!

  • At least you’re getting money back, everything is something. I just did my taxes last night (packing procrastination) and I owe $500. I wish I could say I made a mistake somewhere along the way, but it was carelessness. I just didn’t put the thought and effort into making sure I was getting enough tax taken off between the two jobs. So dumb, but I guess it was a lesson learned. Could be worse.

    • Yea, I know I shouldn’t complain. And $500 isn’t cheap, but it could definitely be worse. Only one job to think about next year. :)

  • I filed my taxes ASAP, and I got about $275 back. I wasn’t expecting anything back, so that was a nice little boost. When I was in undergrad, my parents could still claim me as a dependent, so I didn’t have taxes of my own to file, and thus no refunds. I’ve never had a giant refund like that!

    • Oh man. How much were your parents getting back, by claiming you? ;) Only teasing. My family has worked out stuff like that before.

  • We’re in the same boat! We used to get huge refunds when we were in college. For the last year or two, we’ve pretty much broke even.. and then this year, we actually owe! I’m going to do one last check to make sure all the information is right, but I’m pretty sure we’ll end up owing something no matter what. We just don’t have anything to deduct (no school, no kids, no low-income credits).

  • I haven’t filed mine yet, but I think I’ll be getting a refund. Not a huge one, but still that’s better than paying in. I usually have to pay into the state, last year’s was $35. I can handle that, but I am hoping to not see a huge increase in the amount I owe. I had some freelance, untaxed, income this year and I’m not in school anymore since I graduated in May 2012… YIKES! We’ll see what happens :)

    • Good luck! I only had a little bit of untaxed income from 2013, and I’ve already made more freelance income this year than I did all of last year… so we’ll see how that changes things in another 12 months! :P

  • Every year we plan NOT to get a refund. Sometimes we fail like the year we installed a heat pump and got a big energy credit which created a refund. But normally we try to come as close as possible to breaking even. We absolutely do not want to give the government an interest free loan. We’d much rather divert that money into our investments. As long as we pay in enough to not owe an underpayment penalty, we are happy if we owe.

  • I honestly have no idea how things are going to work out for us this year as there are a ton of strange variables involved.
    1. We had a rental property for the first 3 months of 2013 and subsequently sold it.
    2. I bought back $4800 of my DB pension from my previous maternity leave
    3. We paid about $10,000 in daycare expenses

    I’m guessing a refund but honestly we’ll see once my MIL (our accountant!) works through our taxes for us.

    • Without knowing how much you make, I’d guess there’s a refund somewhere in there too. What would you do with it, if you got one?

      • I’m pregnant again so I think if we get a return, it’s going to go into our emergency fund for when I go on maternity leave again this summer. EI sure doesn’t pay very much :)

  • Hmmmm I seem to be in a different boat. I’d say my tax returns have averaged $3-$5K since student years and almost all of it can be contributed to donating to my RRSP. Although I know I should hate receiving these kinds of returns (I’m basically giving the taxman a full year’s loan) it is a nice chunk of change to receive.

    I thought this year was going to be different as my RRSP amount was way smaller due to being on mat. leave the year previous, but if you pay for daycare that’s a whole other game changer. I was able to claim $7K off my net income thanks to the hideous cost of daycare and my return is going to hover around $4K.

    I’m putting this out there as big returns do exist post student years!

      • Pay off my mortgage or contribute to the new year RSP :) Sadly nothing more exciting but it does become a perpetuating cycle which should keep me in a good place.

  • I’ve always wondered how people received such huge tax refunds! It’s amazing! Since my tuition credits ended a few years ago my refunds have gotten smaller and smaller. This year it looks like I’ll OWE $5. I make under $19,000 a year so it kinda shocked me. I kinda assumed I’d get a small amount back- even if it’s just $100. I guess I need to start figuring out ways to get tax breaks.

    • Well, owing $5 is better than owing $500. :) Do you have any medical expenses you can claim?

      • Definitely agree!

        After medical insurance I paid about $200 in medical fees. So I can’t claim that. I’m under the 3% rule. I think I can claim the WITB but it doesn’t seem to show up in my tax software program. I’m still looking into this.

        My small income however has motivated me to find something new. Finally. I’ve been holding on to a job for years now with no interest in moving up. I’m hoping 2014 is the year I go for it.

  • My refund is $265 which is my lowest since I was 15. My husband’s is $2399 though, since everything maximized better under his name (his tuition from 3 years ago, dependant etc.). My brother-in-law was so disappointed cause his return is $0.67. lol

  • I know the feeling, I’m a student just a couple months shy of graduation and last year I got a pretty nice tax return. So it’ll definitely be an adjustment for me next year. Taxes always freak me out too, I always think I’m missing something and I don’t understand half of the terms and meanings..

    I also want to say that I’ll definitely be downloading your budget template! What a great tool, thank you for sharing that :) Budgeting is also going to be a huge adjustment, but I really want to pay off my school debt asap so I can start saving for other things too!

    • I hope it helps you, Alyssa! Let me know if you have any questions about it. And good luck paying off your student debt!

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