April 30th is just around the corner, but it doesn’t have to be stressful this year. Whether you do your own taxes or use an accountant, you can make it easier and less expensive by having your paperwork ready. Follow these simple tips to prepare for filing your income taxes.
Spend some time now to develop a year-round system for sorting and storing documents. Next year you won’t have to scramble to find everything at the last minute and risk losing out on valuable deductions. Staying organized throughout the year is important.
Prepare three folders or large envelopes and label them Income, Expenses/Deductions and Investments.
File all the documents related to your last year taxes (T1 Generals, T4 slips, Notice of Assessments and other income.) In future years this will be easy because you’ll put them in the correct folder as you receive them.
In the Income folder, put all the documents related to income earnings as you receive them in the mail or from your employer. Include documents for employment income, rental income earnings, self-employment income earnings, and any other documentation.
In the Expenses/Deductions folder, put all documents related to employment expenses or deductions. Keep receipts for each expense category in separate envelopes, such as utilities, kilometres driven for business, medical expense receipts, travel expenses, charitable donation receipts, child care expenses, etc. Write the category and purpose of the expense on each receipt.
In the Investments folder, put all documents related to investment income earned. This includes T5 statements for investment income, RRSP contributions, purchases, losses, dividends, sales, interest, stocks, ect.
Everyone’s scenario is different when it comes to filing taxes. Contact your accountant for clarity or for more information on how to prepare your taxes. For more information on filing your income taxes in Canada visit the Government of Canada website >>