Showing posts with label tax season. Show all posts
Showing posts with label tax season. Show all posts

Saturday, January 16, 2021

6 Ways to Make This Year's Tax Season Easier

The new tax season is upon us. For 2019, almost 31 million Canadians filed their taxes by mail or electronically. This was despite a global pandemic that virtually stopped citizens from doing anything. 

The upheaval of the previous year could result in an abnormal tax filing season. There are ways to make it easier so nothing is left out. Here are six tips to consider.

1. Get Organized

The organization is a top priority to receive the maximum refunds and avoid potential audits. All of your paperwork must be ready so you can efficiently file your taxes. If you didn't have your work organized already, then you must take time to do so now.

Ensure receipt of your T4 slips before the due date when it's supposed to be delivered. Pull out all receipts and invoices related to business expenses. Locate bills for university tuition or student loans. Finally, organize the paperwork related to tax-deductible donations.

Once the information is gathered you want to separate it per its section on the tax form. Thus, income, interest, and dividends are first. Deductions and credits are underneath that information. If anything is missing, then see if it can be retrieved online.

2. File As Early As Possible

You don't have to wait for your T4 slip to arrive before you file your taxes. You can start as early as 12:01 a.m. on January 1. As long as the government offers updated tax forms, you can start adding information when it comes to deductions and tax credits. 

You actually don't have to wait for your T4 or T4A to include income information. You'll be able to pull the data from your last pay stub or year-end investment statement. The one thing you'll need to close things out is the employer's or investment firm's government ID.

3. Have Funds Available For Payments

Unfortunately, there are times where you'll owe taxes. This is something you might be aware of before the new tax season. Especially if you collected non-taxed unemployment or ran your own business. 

For these situations, you want to have the necessary funds to pay taxes due at the time of filing. If you don't have them available when you complete the forms, then work to get the funds so they're available when the official filing date comes around.

4. Invest Maximums Into Retirement Funds

One way to reduce your tax values is to maximize your retirement investments. This should be done at the end of the previous year for some. Other types, like a tax-free savings account (TFSA), might allow you to make contributions at the time of filing. Take advantage of this to minimize tax liabilities.

5. File Online

There are plusses to file taxes online Canada style. First, your fear of on-time delivery by mail is minimized. Online filing through companies like Cloudtax sends your information directly to Ottowa and the provincial governments. 

Second, you receive your refund much faster. If you decide to file online then watch out for underlying fees. There shouldn't be any if you file a standard T4. However, companies might charge extra if you need to file line-item taxes for your business.

6. Let Someone Else Do It

Having a professional handle your taxes takes a huge burden off of your shoulders. They not only put together the documents but they also review information to see if any further reductions can be made on your taxes. 

In the end, they can help increase the refund you thought you'd receive. Yet, this doesn't happen without following step one in this process. 

You still need to organize all of the required paperwork. The tax professional can't produce the best outcome for you without the necessary T4 & T4A slips or the required invoices and receipts.

The above steps might seem daunting at first. However, you don't have to implement them all at once. Regardless if you file on your own or through a tax service, preparation is at the heart of everything. 

When you have all of the required documents, filing your taxes is much easier. On top of that, it results in a maximum refund that can help support your family in the new year.

Friday, July 14, 2017

5 Simple Accounting Hacks for Small Business Owners

If you are starting a small business, or you are searching for ways to improve the way yours is currently being run, you may want to make some changes to your accounting practices. 

You would be surprised at how much of an impact poor accounting can have on a business, or how much time it can waste to get the different calculations squared away. Here are five simple accounting hacks that should help any small business owner.

1. Have Two Bank Accounts

One of the biggest mistakes that many entrepreneurs and small business owners make is when they decide to use their personal account for business purposes. Not only do the lines of spending become blurred, but it is much harder to keep detailed records when you are using one account for two different purposes. 

In those cases, you could hire expert Brighton & Hove accountants to sort out the accounts and how you would have to file your business taxes.

2. Keep Accurate and Detailed Records

You may wonder how some small businesses seem to struggle a lot more come tax season. The reason is because they have not kept accurate or detailed records. When you are running a business, every single transaction should be logged. 

Whether you are keeping paper records, or you are entering everything into a computer file, you must be detailed and accurate with this work. The more records you have, the easier it will be for you to fill out your tax forms accurately.

3. Determine Your Tax Exemptions and Learn the Deadlines

One of the perks of running a small business is the tax incentives and exemptions that you may qualify for. But if you are not aware of these specifics, you may end up filling your forms out incorrectly. 

And while the IRS does take a lenient tone with those who mistakenly file their taxes incorrectly, it is still not a good idea to anger the tax man. Similarly, you will want to keep a handle on all the relevant tax deadlines throughout the year. 

The more you are aware of these deadlines, the easier you will find it to get everything filled out and squared away.

4. Schedule Profit and Loss Statements

The best way to know how your business is performing is through a profit and loss statement. However, you do not want to have these statements created in a haphazard way. 

Figure out a period that will work for you – whether it is weekly, bi-weekly, monthly, quarterly or annually – and stick to it. You can always have statements created for different periods. 

For instance, setting up monthly, quarterly and annual statements is a good idea. That way you can compare your progress from one month to another, but also to previous quarters and years.

5. Calculate Margins

What is your margin? It is the revenue subtracted from business expenses, which is divided by revenue. This percentage tells you what margin you are making on a product, activity or service. Understanding your margin is key if you want your business to succeed.

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