Smooth and Steady: Preparing for Tax Season

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Smooth and Steady: Preparing for Tax Season

Sep 27 2023

It’s that time of year again. The air is turning cooler, the days are shorter, and the annual tax season is right around the corner. If you’re like many, you’re already dreading the piles of paperwork, receipt chasing, and organizational headaches.

Sound like you? Here are some top tips and tricks for both individuals and businesses to consider when prepping for this year’s filings.

Make filing your friend

It may seem like a no brainer, but getting properly organized will save you both time and money during tax season. Set up good habits and routines, create a system, and follow it. Consider things like:

Making it convenient. If it’s out of the way, it’ll get bookmarked as a later to do (and that’s how things get lost).
Creating a “drop zone.” Whether it’s a basket or a drawer or a file, make sure there is somewhere you can put your documents. This is especially important if you are procrastinating on their categorical organizations.
Color coding your folders. Thoughtfully organize and store your documentations so you can easily find them later.

Creating a place for receipts. Write on the receipts too, so you’re not guessing what they were for later – i.e., personal, business, etc.)
Utilizing technology. Things like QuickBooks or other account software systems make it easy to track things like mileage, deductions, charitable donations, and more.

Keep the backups

We all know that receipts can easily get lost or damaged. Protect and store these records by keeping a digital file of them. While it may seem daunting, the task can be as simple as:

Choosing email receipts when possible
Scanning paper receipts as a PDF on your phone
Saving PDFs of utility bills (typically available on your provider’s site)
Scan expenses as you go, it’ll save you time in the long run

Create categories

When organizing your documents, consider breaking them into categories. Creating these silos will be helpful when you are talking with your tax pro about things like deductions.

Categories to consider include:

Income-related documents (T4s or contracts)
Receipts for potential write-offs (mortgage interest, property taxes, charitable donations, etc.)
Last year’s tax returns and dependent information (like having a new baby)

Other (RRSPs, other items you may have questions about, etc.)

Be consistent

Filing your annual tax return is one of the most important financial transactions you do every year. Even if you enlist the help of an expert, you are still required to provide the documentation, so the details of your tax return should be a year-round practice.

Get into the habit of saving and organizing your documents (like the tips above) throughout the year instead of waiting until January (or later!) to get started. Whatever routine or system you start, no matter how many label makers are involved, consistency is the most crucial factor in its success.

Now that you’re organized, contact us!

Mowbrey Gil works with diverse businesses, organizations, and individuals to provide customized accounting, auditing and taxation services and we’re here to work with you!

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