subscribe to the RSS Feed

Wednesday, March 29, 2017

Dreading Taxes

Posted by Tim Stobbs on March 16, 2015

You look at the form and turn away, but then look again anyway.  Your mind screams for you to stop this madness but your press on away just to finish up this section of the form.  Then it is over for today, you rest and regain your strength to face the beast that is your taxes.

The above paragraph is a bit exaggerated but not by much for some people.  Dreading your taxes is a fairly common event, but what various is the amount of procrastination that goes with it. I should know as I am a bit of expert of avoiding doing my taxes.

I’ll clean the house, fix something, play with the kids, read a book, cook something all to avoid doing my taxes for a few more minutes.  Yet the reality of the situation is my taxes are actually not that difficult anymore.

In the beginning taxes were drop dead easy.  Input T4, add in a few deductions and file it.  Done.  Then we started adding things over the years like kids and all those possible deductions, a home based business and all those fund calculations and eventually taxable investments with all that tracking that goes along with that.  Eventually my taxes expanded from 30 minutes to several hours and finally half a day to prepare.

So for number of years my taxes got progressively more difficult to do by myself, but in the last few years they have turned into something that is fairly stable.  So now I don’t have to learn an entire new section each year, but rather just spend my time double checking everything rather than spending hours on CRA’s website reading tax bulletins trying to understand some detail of if a deduction applies to us.

This stability has allowed my wife and I to do some minor adjustments to our organization to make things a bit easier such as:

  • We track all our house bills (water, heat, power) in a spreadsheet to allow easy roll up at year end when we calculate business use of the house.
  • My wife tracks her business accounting with a little program that allows her to assign tax categories during the course of the year.  So come tax time she prints out a report with the totals for me to review.
  • I created a file folder each year and put any tax related slips I may need in it starting with the notice of assessment from the previous tax year.  That way I don’t have to look around for the various paperwork when I start entering in information.

Each of those are fairly minor items, but they all help to make filing our taxes a bit easier at the end.  I’ve come to realize that I actually don’t dread my taxes…I dread all the organization that I have to do to get ready to file them.  So by spending a bit of time during the year to make things easier eventually pays off to make filing our taxes just a bit easier.  It isn’t perfect by any measure, but I’ve managed to shift a dreaded task into something tolerable.

So do you dread preparing your taxes?  Have you found any tricks to make it easier on yourself (other than the obvious of paying someone else to do it)?

Comments

2 Responses to “Dreading Taxes”
  1. Mitch says:

    We use UFile to file our taxes. I find it very useful for us. Even with a child, taxable investments, and a rental property it is fairly easy to use. And, the software maximizes the return so you just punch in the numbers and it gives you the best possible outcome rather than trying to figure out if I should claim something or should be my wife.

  2. deegee says:

    I have completed my tax forms every year since I first filed them in 1985. Over the years they have varied between easy and difficult. Buying my co-op apartment in 1989 made them more difficult because I began itemizing my deductions. In 1990 they again became more difficult when I had my first capital gain.

    In 1997 they changed the cap gains law so that became tougher for one year. In 1998 I paid off my mortgage which made my state return much easier. In 1999 the state repealed its commuter tax which included a big PITA calculation I was only too happy to see go.

    In 2001, I began working in another state which really made my state taxes more difficult. When I ERed in 2008, I had one really tough year due to cashing out my company stock. That was the most difficult year for filing my tax forms. Almost had a paid professional do it.

    But starting in 2009, things have calmed down considerably. No more extra state tax forms, no more wage income. A few years later, I had only cap gain and dividend distributions and did not itemize my deductions, so I was able to file a short form (1040A) for the first time since 1988.

    Starting in 2014 I have begun “bunching” my itemized deductions which will save me a few hundred dollars in taxes over a 2-year period. So 2014 and subsequent even-numbered will be a little tougher but the odd-numbered years will be easier.

    I have a skeleton version of the tax forms in a spreadsheet which is linked to my checking account register stored with it. This enables me to do a lot of what-if scenarios and help me figure out my estimated taxes now that I have no taxes withheld any more.

home | top