Tax season is a bittersweet time for all of us. But it is one of two certainties in life, so sooner or later you’ll have to bear down and get it done. In order to make it more sweet than bitter, preparation is the key to smooth filing and your best return.
Let’s take a look at six things you can do to get yourself ready for tax time.
1. Do a review.
Chances are, this is not your first rodeo. The best place to start is where you’ve already finished - the previous year’s tax return.
Have a look through last year’s tax return and notice of assessment, and take particular note of any big life changes that have occurred since then.
Did you get married? Change your name? Have you moved? Each of these has implications for your taxes - for example, if you did sell your home you need to report that sale, even if it isn’t taxable.
Next, create a list of documents included in last year's return. This will help you determine what you will likely need for this year.
2. Check for missing pieces.
Is there anything you forgot last year? Maybe there are deductions or credits from the previous financial year that you can carry over and include on this return.
Some examples of commonly missed items are:
medical expenses
disability tax credits
Canadian caregiver credit
union dues or licensing fees
tuition credits
moving expenses
It’s not too late! If you missed these last year, be sure to tag them on this year’s filing.
3. Get organized.
Nothing ruins a tax preparer’s day quite like a client walking in with a bag full of loose receipts and envelopes. They are there to file your taxes, not play forensic hide-and-seek.
Get your documents and receipts together and in order before you go. If you’re not sure what you need, speak with them before you go and they will tell you what you need to provide.
If you are going to visit a tax office, be sure you have hard copies with you. You will very likely have a mix of digital and paper copies, so print out anything that isn’t already in paper form. Be sure to check all your relevant accounts and emails, and talk to any employers, institutions, and organizations to cover all your bases.
Tax preparers are neither mind-readers nor magicians. If something is missing from one of your old workplaces, or you missed the receipts from a few charitable donations, they’ll never know. They can only work with what you bring to them.
4. Make categories.
If you run your own business, you’ll want something more convenient than a three-foot stack of printouts all lumped together. Sort through your paperwork and divide everything into categories.
Use the template below to help you get it all sorted out:
If you have employment expenses that you need to claim, use this template to sort those out:
If you earn income from a rental property, use this form to get the details together:
5. Get informed.
While you’re preparing all of your documents for the Canada Revenue Agency, don’t forget that they offer a huge resource right on their own website.
Sign up for a CRA My Account and you can see your tax return history, and all info they have on file, and review any documents filed by your employer. Have a good look through everything to make sure it is accurate and up-to-date.
6. Take responsibility.
When it comes down to it, there is nothing more important than taking responsibility for your taxes. Filing can be tedious, but remember that it is a legal obligation.
As we said in step 3, a tax preparer can only work with what you provide. It is up to you to take ownership of your financial life so that you can get the most out of your return, and keep what you may owe down to an absolute minimum.
Now get out there and get to work! You only have to do this once each year, so go get it out of the way and get back to what you like best - being finished with your taxes for the year!
Here are some links to help your tax season go smoothly:
Written by Stacy Stanley-Young and Lyle Mustard
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