Five Tips To Organize Your Paperwork For Taxes
Do you go through the same last-minute traumas every tax season while scrambling for receipts and documents? Well, if you do, you’re not the only one. After getting over the hurdle of filing taxes the first time, many people forget their resolutions to maintain their income and expense paperwork. And, once it’s time to file again, the stress and anxiety kick in once more.
To help you prepare to file your taxes swiftly year after year, Brunning & Company Chartered Professional Accountant has put together a list of five tips to organize your paperwork for taxes. With these tips, you will find it easier to prepare and file your taxes.
Tip #1: Check last year’s returns.
Your tax return from last year is an excellent starting point, it is going to remind you what you claimed last year and what slips or deductions you should be looking for this year. You can prepare a checklist for the current year, so you don’t miss out on anything.
Tip #2: Maintain your T-slips.
Set up a place in your home to put all your tax slips that start to come in during the first couple months of the year. Keep them all in one place so that when you are ready to do your taxes, you don't have to hunt for them.
Tip #3: Tax deduction proof.
Some of your deductions or credit backups will also start to come in at the beginning of the year. Put them in the same place as your other slips. This includes RRSP slips, donations, childcare, etc. Some of these documents can come throughout the year like medical expenses, so it is best to have a designated spot in your home to put them as they come in.
Tip #4: Accurate accounts.
If you run a business or rental property, create a summary of all your income and expenses. You need to make sure you have supporting documents for all income and expenses so that you can provide a backup to the CRA (Canada Revenue Agency) if ever requested. Alternatively, if you have a bookkeeping file make sure that it is cleaned up and accurate throughout the year to avoid the rush and stress.
Tip #5: Maintain a tax folder.
The CRA requires you to keep your documents for six years. This is because they can go back and question items on prior year returns and you need the backup to prove your claims. Create a tax folder and add to it throughout the year to avoid hunting for the paperwork, receipts, and slips you need when the time comes
For more tips on and guidance with your taxes and paperwork, reach out to Brunning & Company Chartered Professional Accountant in Lethbridge, AB. We understand that every business is different, which is why we design custom business accounting solutions for better, streamlined, and more informed business decisions. We offer accounting, tax, and bookkeeping services for female entrepreneurs in Lethbridge, Coaldale, Fort Macleod, Calgary, Edmonton, Red Deer, Medicine Hat, Alberta, and across Canada.