It’s a “La Nina” year, and we are all expecting (and hoping) for lots of snow! Hopefully our time will be spent riding bottomless powder, and enjoying après time with family and friends. We will be so busy enjoying ourselves, that other important tasks will be pushed to the side, or put on hold until the spring.
One of these important tasks will be the preparation and filing of our tax returns. Yes, it’s just around the corner! Rather than having taxes on your mind while trying to focus on the soon to be “epic winter”, why not get most of your tax preparation work done ahead of time, and scratch it off your “to do” list?
Start by getting your receipts organized and prepare your tax return as soon as you receive your various slips (T4, T3, T5, RRSP). By preparing your tax return early, you will be able to plan ahead. You will find out sooner rather than later if you are getting a refund or owe money, and you can plan with your accountant how to best deal with your situation.
If you are getting a refund, file it right a way. If you wait until the deadline, you won’t get your money until the end of May. You don’t want to miss out on those late winter ski gear sales, or treating yourself to a day at Island Lake.
If you owe, you may be able to minimize your tax payable through your RRSP contributions, and you can start putting money aside. This way you will not be scrambling the week prior to the tax due date, figuring out how to come up with the money. (Note: April 30 being on a Saturday in 2011, the filing and payment deadline is moved to the next business day being Monday, May 2).
If you have your returns prepared by an accountant, they will appreciate you for bringing your information ahead of all those procrastinators. Ask your accountant if there are things that you can prepare in advance that may reduce the time they have to spend preparing your return. For example, if you have a lot of medical expense receipts, you could enter them in order by date on a spreadsheet and submit it along with your receipts. Accountants charge by the hour, and the “messier” your documents are, the more it will cost you. Well organized receipts can make processing your tax return efficient and save you money.
Also make sure to take a few minutes to let your accountant know what you were up to in the past year. Did you move, start a home- based business, set up a home office, entertain clients...? It is very helpful when “we” accountants review your receipts that we know what to look for. We are good with numbers, but can’t always understand your life by simply looking at your receipts. For example, if you moved from another city or province tell your accountant how many days you were on the road and how many family members were with you. Sometimes it is more beneficial to claim an allowance per person per day instead of the actual expense.
I know tax time is probably the last thing that you want to think of right now, however if you try these tips, it may turn out to be as pleasant an experience as possible: Have one of your favorite beverages (not two), and work on your receipts while watching a repeat of your favorite TV show, or a movie for the second time around (remember, if it’s too captivating you won’t focus on your task).
I wish you all the best during the holiday season. Have fun in the mountains!