It’s the most wonderful time of the year!
No, it’s not Christmas (or back to school) – it’s income tax season!
I love income tax season and it’s not just because I have always received a refund, either (although that is certainly a plus). The process of preparing for tax season appeals to my very Type-A personality.
What can I say? Getting organized gets me going – and in a lot of ways, that’s what tax season is all about to me.
I know. So nerdy. It’s fine.
Are you getting ready to file your taxes? With the deadline for employers to provide T4 slips two days away, here are six things you can do to make the process of filing your taxes quick, painless and – maybe – enjoyable this year.
Six things to do before filing your 2019 income tax
Please note: while most of these tips are applicable across jurisdictions, I am Canadian and, therefore, I am writing from the perspective of a person who is filing taxes in Canada.
Register for a My CRA account
I love how, with a My CRA account, all your tax information is available at your fingertips. If you don’t already have an account set up, I highly recommend it.
That said: whatever you do, don’t lose your login information! If you forget your username or lose your password, you have to re-register – and wait for them to physically mail your new information to you. Who has time for that?
So, yes. Write your information down and store it somewhere safe.
Get your paperwork together
As soon as tax forms begin arriving, I start a folder. I date it and that’s where our paperwork lives until it’s time to file.
Items you’ll want to track down could include: T4 slips, charity receipts, relevant medical receipts, RRSP and TFSA receipts, paperwork related to students loans (if you are blessed enough to have them. Ugh)…basically, anything with a number you need to include.
I would also recommend tracking down your notice of assessment from the year before to help determine your contribution room for retirement savings. If you have a My CRA account, this information will be available online.
DIY or take it to a professional?
Once you have all your paperwork together, it’s time to decide whether you’ll do your taxes yourself or if you’ll hire a professional.
I have done both. Up until university, I had an accountant do my taxes – not because they were complicated, but because that is what my family did. For many years, Jeff’s father did our taxes for us. Last year, I decided I should take matters into my own hands and filed our taxes on my own for the first time.
This decision largely comes down to personal comfort. Do you feel comfortable with the idea of doing your own taxes? If you do, great! If not, there’s certainly no shame in seeking our assistance from others.
How will you file your taxes?
Deciding what route to take is only one part of the equation – the next step involves getting more specific about the option you’ll be pursuing.
If you’re using a professional: will you take it to an accountant or go to a place like H&R Block? If you’re doing it yourself – what software will you be using – and how much (if anything) is it going to cost you to file a return. In both scenarios, there are a lot of different ways you can approach your taxes. Taking some time to think about it ahead of time is helpful.
Know the deadlines
I’m not just talking about the filing deadlines (although you should make sure you know those); this also applies to things like the deadline for RRSP and TFSA contributions. Knowing and planning for the deadlines will help you get the most benefit out of these tools when it comes time to file your taxes.
Make a plan
No matter how it turns out, you should have a plan for how to handle the outcome of your taxes.
Are you getting a refund? Think about how to put that money to use! Maybe it will mean an extra snowball payment or an addition to your emergency fund or, heck, maybe even a little extra spending money! By having a plan, you’ll be able to ensure your money is used in the most effective manner possible, no matter how you choose to use it.
Or, alternatively, do you owe money this year? If you do, you’ll want to be thinking about how you’ll go about paying back any outstanding balance.
Filing your taxes doesn’t need to be stressful. I was amazed at how easy it was to file last year. It took some preparation, some organization and some planning but it really was a breeze – and maybe a little fun.
Do you file your own taxes?