bookkeeper in squamish

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(604) 848 9526

1345 Winnipeg Street
Squamish, BC, V8B
Canada

(604) 848 9526

Full Service Bookkeeper in Squamish, BC Bookeeping in the Sea to Sky Corridor

5 Tips to Get You Ready for Tax Season

Tips

5 Tips to Get You Ready for Tax Season

Christine Campbell

Tax season in Canada begins now, with returns for individuals due April 30th and self-employed workers due June 15th. Here’s a brief list to help you get a head start on the process.

Step 1) Get Organized

I know for me I have multiple places where receipts are stashed away. On a good day, I’ll move digital receipts into Dropbox (a personal management app), filed under ‘Receipts for the Year’, but most days in the hustle and bustle digital receipts end up staying attached to emails. So if you're like me search through your emails, hard drive, and any other apps or programs you use to store your receipts.

Make sure you give yourself a day or so to print out your digital receipts and gather all your paper ones.  Once you have them all together, the next step would be to create a paper or digital filing system. There are many receipt apps to help you stay organized such as Dropbox or OneDrive.

The filing system should contain categories that directly link tax category guideline set out by Canada Revenue.  Check with your bookkeeper or visit Canada Revenue for guidance.  This will make it easier when it comes to filing your taxes.  Have your receipts organized in piles according to tax categories relevant to your return.

STEP 2) DON’T FORGET!

If you run across any paperwork that is unfinished, now is the time to organize it. This would be the time to check with CRA or your bookkeeper for business-use-of-home expense (property tax, interest on mortgage, and utilities) and auto expenses (gas, and repairs). Check with the CRA website for guidelines on use of home expenses & auto expenses. Think about additional expenses like courses and books used to expand your business that you may have done over the year.

You may have medical receipts, bills, unpaid parking tickets, or even something that slipped by and went to collections. Be sure to visit places such as your drug store, chiropractor, or your physiotherapist to get a printout of all your transactions of the past year. While you’re digging through the drawers and shoe boxes, start thinking about your personal expenses such as entertainment, kids activities, medical, and school.  You can always ask your bookkeeper for a list of suggestions if you’re unsure which is a business expense or a personal expense.

Step 3) GATHER YOUR PROOF OF INCOME AND EXPENSES

If you are sole proprietor, the simplest method is to prepare your year-end document using your invoices. Every invoice out is income. If you accept cash payments or you don’t have an invoice system (recommended), keep a record of receipts for every payment. We recommend setting your company up with an accounting system for proof of income. There are many cloud based systems out there to pick from - it’s amazing how quickly you can get paid when your customers simply click a button.

The Canada Revenue Agency requires by law that all businesses need to keep proper records. This means all documents, slips, and receipts show what you earned and what you spent.  This is a good time to get on top of what you can claim and what you can’t throughout the year. Having a bookkeeper will help you stay on track of this monthly, quarterly, or yearly.

All employers are required to send out T4 slips before tax time, usually in February.  If you haven’t received your T4 by the end of February, contact your employer.

Step 4) BE AWARE OF YOUR BENEFITS

There are a variety of benefits you may be eligible for depending on your situation; such as the Canada Child Tax Benefit, GST/HST credits, and Provincial or Territorial benefits. Do you have any tax free saving accounts or investments?  Gather your RRSPs & RESPs.  This is something to take into account when filing your taxes.  If you hire an accountant or tax professional to do your return they can inform you of the benefits and opportunities.

Step 5) DECIDE YOUR METHOD

Now that everything is ready for this year, it’s time to decide how you want to stay organized.  Do you use an accounting system?  Where do you store your files (digital and paper)?  How much of your time will this all take?  And where is your time best spent?

Many small business owners employ a bookkeeper to help them keep on top of their paperwork through quarterly reports. Bookkeepers then send these reports to an accountant at the end of the year, keeping you free to focus on growing your business. This method is simple, quick, and an inexpensive way to make sure your Revenue Canada relationship is trouble-free!

Contact Christine Campbell today and discover how relaxing it can be to have a bookkeeper!