Nine Ways To Make Your Tax Preparation More Efficient
Gathering all the tax return information to send to your accountant and/or CRA can be unnecessarily time consuming and involve way too much paper. GGFL Associate Partner Jean McDonell offers these tips to make the annual chore a little less . . . well, taxing.
- Ask your dental professional, pharmacist or other relevant health professional for an annual statement of your expenses. This eliminates the need for individual receipts.
- The same applies to people with portfolio investments who must report gains or losses. Ask your broker for one report for the entire calendar year.
- If you own a rental property, or are self-employed, you may wish to tally your expenses or provide a summary. It is a great way to review your expenses to ensure they have all been captured. Be sure to keep all the original receipts in case CRA asks to see them after they review the summary you submit with your taxes.
- It can take CRA at least 30 days to process cheques for taxes owed. Even though you have paid on time, CRA will charge interest for that processing period. Yes, you will get the interest back but not before a dose of time-wasting inconvenience. The answer? Pay CRA online.
- For those who wish to provide electronic documents for their tax preparation, free scanning software is available online or in App stores for your smart phone. Microsoft and Adobe offer apps that will let you use your smart phone to scan receipts. Learn more in these instructional videos for Adobe Scan and Microsoft 365. Don’t photograph documents. Scan them and make sure the images are easy to read. Remember that CRA may wish to review these documents at a later date!
- While we’re on the subject of scanned images, don’t send separate images for each receipt. Group as many as will fit on a piece of paper and scan them – again, making sure all are readable. Click here for more tips on scanning your documents.
- If you sell your principal residence, you must report the sale to CRA. It’s a detail, but an important one.
- If you’re an employee and had to work from home in 2020 due to #COVID19 you can claim the home office expenses deduction. You can claim $2 per day for each you had to work from home, up to a maximum of $400. Or you can submit a detailed claim supported by documentation and receipts. Visit the CRA website for more info.
- And don’t forget the RRSP deadline. This year it is March 1. So, if you’re topping up your RRSP and want the tax break applied against your 2020 income, keep an eye on the calendar. Life can happen and you can forget.