Getting Organized for Tax Time
Have you started trying to locate all of the necessary documents to file your taxes? A few receipts in your desk drawer? A few more on your dresser? What about that pile of 'stuff' on top of the fridge? Crammed in the dash of your car? You know the scenario. Now is the time you realize how disorganized your important, financial documents are.
Filing our Income Tax Returns is generally not something we enjoy, however, if you are organized it can be a lot less painful and frustrating. If you're starting this year without any preparation, it could take a considerable amount of time to locate all required documents. Chances are, there will be one or two pieces of missing receipts that you can't get your hands on. This can cost you money and time - especially if you locate them a week or two later and run them into your tax professional. What if you miss out on a tax benefit you are entitled to but can't find have 'that piece of paper' you need? Very few of us can afford to throw away money! We've compiled a list of suggestions to help you through the process this year, as well as how to get financially organized so completing next year's income tax forms will be a breeze.
Set aside a specific block of time to go through your papers. You need to have dedicated, uninterrupted time for this task. Distractions will only make the process a lot more difficult and frustrating. Do you need a cup of coffee or tea? Get it before you start.
Buy yourself a file folder. You need to set up a filing system in order to get/stay organized. We recommend an accordion-style folder with pockets where you can put each receipt or document in the appropriate slot, however, regular file folders will work. The main thing is to organize your information. Label the individual file folder. Personalize it for your specific needs. A few suggestions are files for medical receipts, another one for childcare expenses, another for T4's, business expenses, etc. Think of how far ahead of the game you will be next year if you start this now for 2017.
Many of us now receive our tax information electronically. If you do, make sure it is stored in one folder labelled Tax Info on your computer. If you have emails with pertinent information, make sure to save it in your Tax Info file. Do not leave it sitting in your In Box.
We strongly recommend picking up or downloading a copy of the General Income Tax and Benefit Guide 2016 booklet. It provides a wealth of information that will help you create a checklist appropriate for your individual needs. Determine what information you need, what information you have, and what information is missing. For the online version, go to http://www.cra-arc.gc.ca and follow the links. Paper versions are available at all Canada Post Outlets.
Are you self-employed? We can't stress enough how important it is that you document your expenses CAREFULLY. When you are running your own business, trying to keep up on paperwork can be quite daunting. It's too easy to cram receipts in your wallet or pocket, or worse – leave them in the bag and they get thrown out. Get into the habit of writing down what the receipt is for on the back of it. Use a computer program to help keep track of ALL your expenses. If you don't have an accounting program, an Excel worksheet will work fine. The important thing is to document your expenses. There are many templates online that you can use as a guide to set up your own system. Don't forget little expenses like postage and paperclips – they are considered office expenses.
Avoid last minute panic. Once you have all of the pertinent information neatly organized, do a test run on your Income Tax Return. This way you will know for sure if you are missing anything. Do this as soon as you can before the filing deadline. Be organized and avoid the panic.
File early. The sooner you file, the sooner you will receive your refund. Tax professionals are probably a bit exhausted and harried towards the end of filing season. Filing early ensures you get ahead of the sheer number of Returns completed and filed at the last minute.
We hope these tips give you the confidence you need to move forward with your office and filing organization needs - especially during tax time! If you are still overwhelmed, give us a call. Check out our Pinterest Page for hundreds of creative and inspirational organizing ideas! As always, we'd love to help organize your chaos. We offer complimentary 30-minute consultations in your home, and can create a plan to tackle any sized space! Contact us now to get started!
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