Get Your Finances in Order Before Your Taxes

Hopefully, you’ve been keeping complete records of your finances throughout the year. Don’t wait until the last minute to do your annual preparations for taxes. Even after New Year’s Day, you’ve got sufficient time to get your finances in order before the April 30 tax deadline. If you’re self-employed, you don’t have to file until June 15, but remember that all tax payments are still due by May 2, later in 2022 since April 30 falls on a Saturday.

The earlier you file, the faster you’ll receive any refunds you’re owed. If you do owe taxes, ensure that you meet the payment deadline to avoid any penalties. With all the changes going on in the Canadian tax laws for 2021, many of which may not even be finalized by the end of the year, so your best decision may be to hire expert tax preparers like those at TaxAssist Accountants. 

What Do I Need to Be Fully Prepared to File My 2021 Taxes?

Preparing for taxes requires that you gather together all the pertinent paperwork you or your accountant needs to file your taxes. Your tax burden to the Canada Revenue Agency (CRA) may be significantly reduced when you’ve taken the time to get your finances in order prior to the deadlines. That extra time and organization gives you or your tax accountant the opportunity to make sure you get all the allowances and relief you deserve.

Whether you’re filing as a self-employed individual or not, your accountant may need to request additional information from you if you’re missing something. When you wait until the last minute to get your financial documentation together, you may miss that window of opportunity for additional allowances. To ensure you get all the credit you’re entitled to, make sure your accountant gets financial documentation that includes:

• Income statements
• Unreimbursed business expenses
• Payroll, if you had employees
• Travel expenses
• Marketing expenses
• Paid insurance policies
• Tuition fees
• Interest on student loans
• Awards and gifts to associates and clients
• Childcare expenses
• Professional or union dues
• Registered Retirement Savings Plan (RRSP) contributions

Home office expenses

How Can I Make Prepping for Taxes Easier?
While some Canadians, believe it or not, still throw their receipts into a shoebox, others take advantage of electronic spreadsheets to maintain financial records throughout the year. The easiest way to prepare for tax season is to allow a reliable contractor to set up your bookkeeping at the beginning of the year. Once you’ve got the programs in place, all you need to do is input the data on a regular basis.
But if you’re like a lot of small business owners, you don’t feel you have the time or the inclination to make regular entries in a program, you have other options, such as:

Hiring a bookkeeper to make those important entries for you, either daily or weekly

Saving receipts to turn over to a bookkeeper on a monthly or quarterly basis

Setting aside a few hours every week to balance your books, making sure to keep your personal finances separate from your business

The last tip ensures proper documentation when you’re preparing  for taxes. It’s easy to miss valid deductions when you operate a small business that uses your personal accounts. Get your finances in order with the help of an accountant by maintaining separate:

• Credit cards
• Checking accounts
• Filing systems

And if it’s all too much to manage or even contemplate, contact the professionals at TaxAssist Accountants. They can work with you to set up your accounting systems or do the preparation for taxes completely for you. What you need depends on how much you want to do yourself.

Sources:

https://www.taxassist.ca/our-services/year-end-accounts
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4130/employers-guide-taxable-benefits-allowances.html
https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2021.html
https://www.canadadrives.ca/blog/save-money/7-ways-to-get-a-bigger-tax-return

Date published Jan 14, 2022 | Last updated Jan 26, 2022

This article contains general information only and should not be relied upon for accuracy or completeness. You should seek appropriate tax or accounting advice from a qualified accountant before you take, or refrain from taking, any steps based upon this article. This article should not be construed as tax, accounting or other professional advice and QX Franchise Limited (Master Franchisee for TaxAssist in Canada) disclaims liability for any loss, howsoever caused, arising directly or indirectly from reliance on the information in this article.