Not sure what documents you need in order to file your taxes? Today I’ll share some tips on what you need, and how to make tax time easier for you.
At this time of the year, all your T4s are arriving in the mail. Be careful, these documents are very flimsy and it may look like there’s nothing in the envelope. What should you do once you receive them? Place all documents together in a large envelope or a folder; keep it in a safe place. When it’s time to prepare your taxes you’ll have all supporting documents you need in one spot.
If you have changed employers and changed your home address in the past year, you should contact your previous employer and have them send your documents to your new address. Come tax time, you cannot omit a T4 from a previous employer because of an address change. That’s not a valid excuse. The government will find out and you will be fined, and forced to pay interest on that fine. Remember it’s your, money keep it.
We are allowed to file electronically and it’s a great idea to take full advantage of doing so. While we are given the privilege of doing just that, the government can pull your name in a random audit. If you are randomly chosen, you will be sent a letter that will require you to forward all supporting documents to the government. Therefore, it is imperative you keep all documents even after filing your taxes.
One of my biggest concerns during this time, is with tax preparation companies. You are promised your refund as soon as they file your taxes. Be careful – in most cases, it is advertised that it’s free to get your refund the same day. What is often left unsaid is that your refund will be significantly smaller (they take a portion of it as payment for the quick turnaround). That means, if your refund totals $500.00, you may only take home $450.00. In some cases even less. I know it’s wonderful to get your refund as soon as possible, but if you have paid the company $65.00 to prepare your taxes, why not just wait a few days and get your full refund? Again, it’s your money, keep it!
Another way to save money on doing your taxes is to share the cost of the tax-filing program. You can split it with family and friends, making that $29.95 plus taxes significantly smaller. In fact, this is what I do. I have my family; a few friends and our taxman come over to my house. I prepare a big pot of spaghetti; we take turns sitting with him, while the others enjoy the spaghetti and conversation.
It’s fun, inexpensive, and get’s our taxes done properly.
As always, let me know if you have any questions. I’m here to help.