Back in January, I wrote about how to make the process of filing your tax return a bit smoother before the information started coming in. Now that you’re in the thick of it, how can you make this as painless as possible?
Hire an accountant
If you really don’t want to spend the time reading the tax guides and maximizing your deductions, pay someone to do it for you. A good accountant can easily add more value than their fee by bringing expertise and experience to the table that you simply can’t get by reading the tax guides. Even blogs such as this one are not going to give you professional advice tailored to your situation. You can only get that by hiring an accountant.
If your tax situation is simple you really don’t think you can benefit from having professional guidance, then fire up one of the many software packages available and get to work.
Start with your tax slips
You’ve used the tips from the last post to make sure you have all of the slips you need. Now it’s just straight data entry. Most software packages will guide you in entering the amounts in the boxes of each slip in the correct place. That being said, don’t blindly rely on your software to catch every possible mistake. It won’t tell you if you have entered things more than once. You should be able to match up box numbers and form numbers, but it’s still a good idea to understand where those numbers should end up on your actual tax return. Once you’ve got your slips inputted, pile them neatly in an organized manner so that you can re-check your work later.
The messy parts
After your slips are in, then it’s time to dive into the parts of your return that may require more thought. Investment transactions and business expenses are examples of these.
Reviewing your work
Once you’ve got everything ready to go, my suggestion is to check it over and fix any mistakes that you find. Then, put it away for a day and come back and look at it again with fresh eyes. I realize this advice may bring screams of protest out of a desire to get it over with as quickly as possible. These objections may be justified – especially if you had to use all your willpower just to sit down and do it once. The payoff of looking at it another time is that you’re more likely to notice mistakes or remember things that you forgot. It’s a lot quicker to fix a mistake before you file than it is to fix it after. After you’ve filed, you need a T1-ADJ to correct any mistakes that you’ve made. Do NOT file a second T1 for the same year.
As part of your review, you should compare your return to what you filed last year. Is there a line where there was a number last year but is blank this year? Or has a line gone down a lot from last year? You could be missing a slip – make sure you have them all! There are big penalties if CRA finds something you missed. If your number on a line has gone up, make sure you know why and that you haven’t entered something twice.
File your return online to save paper, printing time, and mailing hassles. Keep a copy of your CRA’s confirmation of receipt with your return as evidence that you’ve filed on time.
When you’re done
Celebrate another tax return done! Go for a walk, or head out to a movie. I used to celebrate the end of tax season with a cookie dough blizzard from Dairy Queen – an indulgence my waist line can’t afford very often. This year, I have a weight-loss competition going with a friend – the first one to 25 pounds gone wins. As I type this, I’m ahead, but only by a tiny bit, so the DQ Blizzard is out! Instead, I think I’ll celebrate the completion of my husband’s & my returns with a night on the couch watching my favourite shows currently piling up on my PVR.
How do you celebrate small achievements without food? Let me know in the comments – I might use some of your ideas. 🙂