It’s been some time since I shared my thoughts and advice from my desk, and with tax season fast approaching, I’ve partnered with TurboTax on sharing a three-part series on how to ace and gain the most from this tax season!
I started to receive stacks of tax receipts and related mail over the last couple of weeks and couldn’t help but to think, who actually enjoys sorting out paperwork and doing their taxes?!
Well the truth is, Canadians are actually early birds when it comes to filing their own taxes, with 80% doing their taxes as soon as they have all their paperwork in order! You wonder why there may be such eager beavers out there? That’s because nearly two thirds of us are expecting to receive a tax refund this year! Which means we’re able to pay down our debts/loans (36%), tuck it away for a rainy day (32%) or put some aside for RRSPs (11%)! And, for some of us, perhaps a little shopping spree (5%)?
Tax season may seem daunting, but with the right kind of preparation, you’ll be well on your way!
Read more to find out 3 reason why I’m NOT overwhelmed by this tax season!
Ever since I moved out of my parents about a decade ago, I’ve always filed my taxes on my own with the help of TurboTax. Of course when I was in my early 20s, my taxes were fairly simple, and as I began to put more towards investments, buying a house, getting married, and starting my own freelance blogging business, doing taxes became a little more complicated year after year.
However, I never let it overwhelm me because if you’re prepared, it’s honestly not a cumbersome exercise at all!
TIP 1: Organize Your Receipts and Paperwork
If you’re working with paper, create physical folders or piles and categorized them based on – food/drink/entertainment, taxis/fares/transportation, investment related such as T5s, employer related such as T4, education, etc. This way as you’re navigating through your tax software, you have everything in order and ready to go!
Now, the best way to get ahead during tax season with your receipts is actually to get them scanned and filed away as you are incurring them through out the year. Of course, I’m sure many of us don’t come to think of this until the rush of tax season, but definitely something that you should consider for the next tax year! It’s great to create Google Drive folders, where you save them and have them also backed up.
TIP 2: Find Out About Your Potential Deductions and Credits
I used to be intimated and confused when it came to tax credits/deductions, it turns out that I’m not alone. Many Canadians aren’t taking advantage of tax deductions or credits as much as they should be, 17% say they actually don’t have deductions or credits to claim!
The best thing you can do is to get educated in these areas before you begin filing your taxes. The TurboTax blog is a great resource and provides a lot of informative content.
There is a list of potentials deductions and credits that you may be eligible for, including medical expenses, charitable donations, RRSP contribution slips, property taxes, education credits for tuition & textbooks, public transit passes and rental receipts.
TIP 3: Have the Right Tools on Hand
If you are following my footsteps on filing taxes on your own at home, be sure to have the right type of tax software installed on your computer. TurboTax offers a CD or Download option (they’ve even released an app!) making it extremely simple to file your taxes online. The software has a built in guide and income tax calculator that is designed to estimate your tax return as you complete your information and filing.
In addition, if electronic NETFILE is what you prefer (i.e. directly transmitting your filing to the CRA online), make sure you’ve updated all your personal and banking information with the CRA and also a bullet proof internet connection! Directly filing with the CRA and requesting for direct deposit payment can speed up your tax return by days.
Whether you choose to do your taxes on your own or hiring a professional, I hope these tips will help you gear up for this tax season! Stay tuned for my next posts as I share additional tips and tricks for tacking the 2016 tax season!
Disclaimer: This post was written in partnership with TurboTax but all opinions are my own.
Awesome tips! I’ve been waiting for this post, THANK YOU. Looking forward to the rest of the series, this is so helpful. 🙂
You’re most welcome! More tips coming soon and good luck with your taxes!!!