Spring forward – Fall back? It’s never too early to start organizing for tax season!
Spring welcomes the idea of cleaning out the nooks and crannies of your home and garage that have been battened-down for the winter and now need refreshing. Now let’s fast forward to fall.
Fall is also the time to get organized . . . . . for your taxes!
Yes . . . taxes!
Like Christmas—tax season is just around the corner.
Fall is a great time to start organizing your receipts. Whether you plan to enter them into a spreadsheet, record them in accounting software, or sort them into categories based on the type of income/expense for your accountant/tax preparer to summarize, it is important to put the project in motion.
Here are some of the reasons why:
· Organizing the myriad of revenue receipts, bills and credit card slips you have accumulated for nine months of operations facilitates the summarizing of your business income and expenses to determine whether a meeting with your accountant and/or financial adviser would be prudent to explore tax planning and investment strategies;
· Knowing the potential tax consequences of taxable income facilitates budgeting, strategic and tax minimization planning and avoids those unwelcome surprises on April 30th;
· Reducing the stress of collecting all your receipts and documents during the limited time frame of a tax season will help ensure you have reviewed and collected all the appropriate expense receipts for the year;
· Having assembled the majority of the tax year’s documents into a concise format will streamline the addition of information/documents pertaining to the final three months of the calendar year;
· Sorting through your receipts to extract medical, dental, eyeglasses, chiropractic and other deductible medical services will enable you to confirm that you have obtained all the appropriate receipts that cover the costs you incurred for this purpose. It is a great time to contact the respective practitioners’ offices to obtain copies of receipts that you may be missing (as cancelled cheques are not sufficient to support a medical expense claim);
· Making a list of the tax information slips you expect to receive will also streamline the process of collecting all your documents for your accountant/tax preparer as you will be able to “check-off” the list as you receive the anticipated documents. If you are unsure what tax information slips you should be receiving, your accountant or tax preparation service can normally print off a tax slip summary from your prior year’s tax return that can be used as a guide;
· Contacting your investment adviser for a printout of realized capital gains and losses for the year-to-date is also prudent if you plan to submit your information for your accountant/tax preparer to determine an estimate of your taxes;
Need to jog your memory of what else you could be missing? Take a look at our online personal tax checklist: http://www.rhncpa.com/resources/personal-tax-resources
So as the chill sets into the air and a light dusting of frost covers the pumpkins—open up the glove-box of your vehicle; gather the stack of receipts/bills from the desk drawer (or as my grandmother used to call it–Fibber-McGee’s closet); grab the banker box of empty manila folders and begin sorting! When you’ve finished, it will feel just like Spring!
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.