Posted by Tim Stobbs on February 1, 2010
Well with tax software on the shelves and ads everywhere for RRSP contributions you know we have hit: tax preparation season. So while you wait for all those slips to come in you might want to consider doing a little pre-tax warm up.
What do I mean by a warm up? Well rather than waiting to the last minute to find all your paper work and entering everything in to a program (if you use one) you start now and make your life a bit easy.
To help you out I’ve written up a list of steps I’ve done in various years:
- Write a list of slips you expect to get. There is nothing worse than missing a slip because you forgot to change an address or someone wrote down your wrong address. That way you can follow up in a timely fashion to file your taxes on time and ensure you get all your deductions and income in. By doing the list now you can slowly add to it as you think about it and you recall all the paperwork you will need for some of those odder tax credits. For example, I should look up my boys swimming lessons since I got a tax deduction for that in 2009.
- Gather all related forms/slips into one or two folders. That way you don’t have to look around you entire file system for one slip later one. Or if you get audited you will already have all the information in one place.
- Estimate your T4. If you buy software consider entering in your information on your last pay statement for the year as an estimated T4 slip (if you have year to date totals). It likely won’t be exactly right, but should give you a ballpark estimate of where you stand prior to getting all your final slips. You can even do this for other slips if you have a good idea what they will be. That way you can actually have a bit more time to think about any RRSP purchases you might need to do.
- Read up on Tax Deductions. Yes I know reading tax information is boring as hell, but if you save a lot of money it can more than pay for your time. So try to find a good summary of tax deductions and read up on anything that might apply to you. If you are looking for a place to start check out this site.
So that’s my ideas on a pre-tax warm up. What have you done in the past to get ready? Or are you a last minute kind of person?