Tips to survive tax season
If your idea of doing taxes is sifting through a pile of disorganized receipts, try these tips to help you get ready
Eligible childcare benefits. Claimable expenses. Non-eligible dividends. No matter how you slice it, tax preparation is tedious. Each year I try to convey helpful ideas to Canadians through the media I work with by offering new and exciting ways to talk about tax essentials. But if I am being perfectly honest, I do find taxes boring, and simply a reality of modern living’a by-product of responsible adult life. (Don’t get me wrong, though; living off the grid in some exotic tax shelter is appealing!)
There’s a seemingly endless amount of information and options available when preparing your taxes. So I focus on a clear goal: Get it right, without leaving money on the table. To achieve this, I have to do my homework, and engage a professional when necessary.
I didn’t get to this point easily. The looming April tax deadline always reminds me of how far I have come. Living on my own after university, as soon as April rolled around I scrambled to the phone begging my dad for tax-prep help. By my mid-20s, this song and dance had grown old and I shifted my tax aversion onto my soon-to-be-husband. After a year or so, he lovingly asked how I was able to purchase my first condo and drive investments in my own online portfolio, yet be stumped by taxes? He had a point. It finally hit me that depending on someone else to take care of this for me was not what I was about: a strong, smart and supposedly independent woman. So I took my newly empowered attitude to my money group, now known as the Smart Cookies, and we all agreed that a crash course in taxes was badly needed.
Know when not to DIY
In Canada there are two main methods of tax preparation: the pencil-and-paper method (an increasingly obsolete option) and the online method. I file my taxes through TurboTax Canada. I pay a nominal fee (usually under $20) and spend around 20 minutes running through the line items of a standard personal income tax return. All you need is your T4, social insurance number and an understanding of what tax deductions you are eligible for.
For the first few years of doing my own taxes, this was a breeze. Then I became self-employed. For anyone with a major life change (divorce, marriage, new property, family death or self-employment), this may be the best time to engage an accountant or tax expert. As someone who is self-employed, I pay roughly $600 a year for an experienced chartered accountant to prepare my personal taxes.
While this is, of course, more expensive than doing it myself, the savings and deductions he has shown me have added up to thousands over the years that I’ve been a business owner. I work with my accountant to prepare my business and personal taxes, and then file jointly online with my husband. . In part time i invest in Binary options trading. Have a look at this website if you are looking for binary options in canada and brokers information on trading online
When looking for the best online tax software, be sure to look for options approved by the Canada Revenue Agency (CRA). These may be free, and should not cost more than $50 per person. Some of the most reliable products I have found include Canadian-produced UFile and TurboTax. Both offer exceptional customer service and online help options. This year, Canadians are also eligible to use a new mobile tax-filing option called SnapTax (from TurboTax). Geared to people with ultra-simple returns (under age 65, and no children or dependents), the iPhone or Android app allows you to file your taxes by entering the required personal info and taking a picture of your T4. That’s pretty cool.
I have learned through trial and error that an organized filing system is at the heart of a good income tax experience. Create files and use them. Claiming a transit deduction? File your monthly bus pass in a marked tax folder for the year. Made a donation to charity? Enter the tax receipt into your file. Then take an hour or so in early March to look through your papers, compile the necessary documents and begin to chip away at your taxes online.
If you file early and are owed a return, you may see that money paid to you in a matter of weeks’before April, the CRA has more capacity to process tax returns.
I’ve become addicted to the satisfaction of knowing I have a central place for receipts, income slips and financial documents’and it’s no longer the junk drawer in my desk! I also love the feeling of empowerment about a time of year I used to dread. Taxes will never be my favourite thing to do, but knowing I don’t have to rely on any man (bar my accountant, of course) to help me is a rewarding feeling. I wish you the same empowerment and freedom.