Everybody run! Tax season is coming!

Tax season is coming! Tax season is coming! Everybody run!!!!!

I'm joking! Tax season doesn't have to be such a horrible daunting task. I get that most people don't like paperwork and that almost everybody doesn't like paying taxes (there may be a few keeners that do?). But, ultimately the key to tax season is setting yourself up for success.

Here are some helpful tips to make your tax season easier:

1) Get a folder or box and label it 2018 Taxes. Then as you and your family begin to receive all your slips, simply place them in the aforementioned folder/box. Sounds simple enough, but it works like a charm!

2) Have a separate folder for all your medical expenses. Let’s be honest medical bills can add up and you want to ensure that you are entitled to these medical tax credits. Medical receipts can be claimed on a 12 month basis and not necessarily on a calendar year so you will want to ensure that you are claiming the most that you can! Have your 2017 medical expenses on hand as well in case they didn’t meet the tax credit in 2017 but can possibly be claimed in 2018.

3) RRSP = Refunds. Or at least in most cases. The government refunds your highest tax bracket when you contribute to Registered Retirement Savings Plan (RRSP). This is a great way to save money, get a refund and then potential use that refund to contribute to other savings or debt! RRSPs can be used for a down payment on your first home or for the Lifelong Learning Plan (LLP) without any tax consequences. However, if you withdraw money from your RRSP for any other reasons, such as retirement, you will be taxed as if it were income. This seems to upset people, but you need to remember that the government gave your taxes back when you contributed and now it is collecting its taxes. RRSPs are a tax deferral vehicle that when used correctly can give your great benefits.

4) If you run a business like a sole proprietorship and have all your receipts everywhere - get yourself an accordion style file folder system Put your receipts together in categories such as advertising, entertainment, office, fuel etc. This makes it so much easier to add your receipts and to unjam your receipts from your car or purse or couch! Tip: Do this from the beginning of the year and you save even more time for next tax season.

5) If you are always paying taxes when you file your return then you need to get advice from a professional. There are additional ways you can reduce your taxes or maybe you need to contribute extra due to additional income or multiple jobs that push you up to a higher tax brackets. Either way, a sound tax professional should be able to determine what is happening and the best method to avoid these types of surprises.

So you see tax season doesn’t have to be so painful! If you ever need any advice or need your tax prepared don’t hesitate to contact me at mngowing@gmail.com or 905 978-7620. 
Melanie Gowing, CPA, CMA