April is here. Last month to get our papers and records organized to file our income taxes for 2014. To be more precise we are less than two weeks away from the deadline. Are you ready?
If you only have a couple of slips like a T4, a T5 and your rent receipts, you are good to go.
If you are self-employed, you may have those slips and a pile of receipts to organize for filing. Are you still avoiding your papers? No more procrastination. It needs to get done ”period”.
I am going to share some tips that I use to prepare my tax paper work. I love dealing with other people’s papers and as hard as it is to believe it I do like dealing with my papers as much. As business activities increase so the amount of paperwork. Can you relate to that?
When I deal with my own papers I can relate to all of you who procrastinate. As organized as I am, I still have to bring them all together, review the work before I file it.
Here are some tips to help you better manage your paperwork:
Tip #1: Always keep your agenda or notebook for each year, it saves lives.
I really do not care if you have your personal bookings besides your business matters. The more the better. If you forget to write the name of a client on a receipt for meals, refer back to your agenda. I was able to remember what the reason of the meeting was and add to the receipt. Now, if this transaction has happened a year or so ago, you will have some challenges. The best practice is to keep updating your records on a weekly basis. On a monthly basis is not that bad. Longer than that may be a bit difficult to remember depending on the volume of business activities.
Tip #2: Medical Expenses – I keep a folder for all dental and medical expenses for a taxable year. I always put the most recent date at the front. When it is time to file my taxes, I have it all organized by date. If you do not have or want to buy a folder, put them on a plastic bag, a small box, a drawer just for that matter. You can choose whichever filing preference you have as long as it works for you.
Another tip that can save you money and your tax preparer a lot of time is to go the Pharmacy that you buy your medical prescriptions and ask for a statement for the year.
Tip #3: Follow the same procedure for all other slips you may have such as RSP contributions, charitable donations, rent receipts, transit passes. Separating every slip by date will save you lots of time.
Tip #4: If you have no systems and are clueless of how to gather your papers in a decent manner, find more tips below.
- first separate all receipts and statements by year (in case you have piled 2015 with 2014 receipts),
- then separate them by category,
- then separate them by month,
- then input all data on a spreadsheet or Accounting software
- make any necessary adjustments such as add carry forward balance from previous years, depreciation of an asset if applicable, etc.
- review your numbers and compare to last year’s return in case you forgot to add a slip or other expenses.
Simple tips that will help you file your taxes on time. Just apply these principles the way is most suitable for you.
“Reduce risks, pay on time, be efficient and save money and time. “ Renata Magalhaes