Next Year’s Tax Season: How To Prepare For It Now

Your taxes are in… or at least they should be.

Did you find yourself scrambling to file on time this year, and every year for that matter? If you, like so many others, see the task as daunting and look for any reason to procrastinate filing, the cause could simply be a lack of organization. Instead of scrambling one week before next year’s due date, make it a goal to stay organized throughout the year. Here are seven ideas to help change your current process.

Create an organization system.
Take note of everything you included in this year’s tax return: income T4’s, investment slips, tuition forms, charitable receipts, medical receipts, etc. With this, you can create a system that will help you organize all of your paperwork throughout the year. Whether you choose to use a paper filing system or online tools, setup a system that will work best for you. Important: Always keep the previous year’s tax return on-hand, as you may need information from it next year.

Make a list of goals.
Do you want to contribute more to your RRSPs or a TFSA, next year? Will you or your spouse be going back to school? Are you planning on completing a project that may offer a tax credit? Think about some of the things you want to accomplish in the next year. Not only do goals change your budget, each may affect your tax return and should be considered when creating your organization system.

Save your receipts.
This is the most obvious tip but one that can easily be forgotten. Every time you get a receipt for a prescription, for a charitable donation, or a stub from a freelance job, immediately file it in your new system. If you remember to do this all year, everything you need will be ready and waiting, for the next tax season.

Read a book.
Some year’s tax returns are simpler than others. If you have any questions about filing, there are a number of resources you can turn to and books you can read. For Dummies has 78 Tax Tips for Canadians and Evelyn Jacks releases a new version of her Essential Tax Facts every year. Reading a book partway through a year, versus weeks before your taxes are due, can help you re-think the way you do your taxes and find new ways to save on your return.

Visit the CRA website.
When was the last time you visited the CRA website and read through information about filing your taxes? You don’t need an interest in personal finance to do so, just an interest in receiving the maximum tax return available to you and your family. For example, here is the CRA’s top five ways to get ready to file your taxes.

Research potential tax credits.
Tax credits aren’t just available for tuition or medical expenses. There are tax credits for children’s fitness, first-time home buyers, public transportation, and even tradesperson’s tools. Do yourself a favour and research what credits may be available for you and your family.

Review your system quarterly.
Every few months, review your new organization system. This is the time when you can organize anything you may have forgotten to file, review your goals, and see if your system is working. If you find that you are not staying organized, ask yourself why. Are you ignoring the process, the same way you may be procrastinating filing at tax time? If you need a reminder, put a note in your calendar to review every three months.

The thought of filing taxes is exciting for some and scary for others. Whether you’re using tax software, filling out forms by hand, filing online or mailing everything in, the process can go quicker with a better understanding of what is available to you and a good organization system in place. And always remember, the sooner you file, the sooner you may see a return.

Caitlin
Writer for RateSupermarket.ca

Related Topics

Leave a Reply