It’s tax time again and it really doesn’t take much time to get things together and make your accountant’s life easier and reduce your bill in the process. Here are some easy tips to help you get organized.
Sorting your tax T-slips and receipts will go a long way to reducing everyone’s stress and enable your accountant to complete your tax return more quickly. Documents you should sort include (but are not limited to) T3, T4 and T5 slips, all donation, medical, RRSP, child fitness and child care receipts and more. It is also recommended, based on the volume of your tax reporting slips and receipts, that you provide your accountant with a spreadsheet listing them so that he or she will get a ‘snapshot’ of your earnings, eligible deductions, tax credits, etc.
If you are self-employed, it is always best for you to summarize your income and expenses (by category) for the year. If you are eligible to charge HST (that is to say, you are invoicing more than $30,000 annually), prepare a ‘rough’ HST return and have your accountant review it for accuracy. You should also ensure that your reported expenses exclude HST (unless you are using the ‘Quick method’ for reporting HST). Remember to keep all receipts for seven years.
Make sure you bring a list of questions for your accountant, some of which may centre on deduction/tax credit eligibility and income inclusion for relevant items.
Finally, don’t be ‘penny wise and pound foolish’. If you have multiple slips and receipts and/or if you are the sole proprietor of a business, don’t trick yourself into thinking you can do your tax return on your own or use a do-it-yourself tax software program. Hire a professional who can ensure that you are getting the most out of your deductions and tax situation. A professional will help you institute sound financial and tax practices and at the same time, ensure that you are in compliance with current tax laws.
Happy tax filing!