Tax Season is upon us and the deadline to file is fast approaching. For many, tax season can be a time of high stress- especially for those who are self-employed.
Although we are not an accounting service, when we are working on building a file for a mortgage a client’s taxes come into play—as do their income statements, their investments and much more. We have a few tried and true tips to help you tackle those taxes—Shall we tell you our secrets?
- Should I Do My Own Taxes?
Every year thousands of people head to the store and purchase a “Do It Yourself” (DIY) tax program. Well this offers a convenient and cost effective option is it really in your best interest? The answer is yes if you:
- Have very simple information such as only a T4 slip to file
- You do not own property or investments
- You understand tax laws and regulations
If you cannot answer yes to at least two of the above, it is highly recommended to seek professional help and have someone file for you. But if you are dedicated to doing them, let’s move onto point #2.
- How To Do Your Own Taxes If Self-Employed?
If you are interested in taking on the challenge of doing your own taxes well self-employed then there are a few things you will need to know.
First, we recommend visiting CRA’s website and understanding fully what you will need to report on. CRA has a “Tax Tips” page that can help you understand the requirements
A note to consider on your reported income: if you are reporting low income due to being self-employed and tax strategy, there are mortgage products that can assist the business for self-client when they are reporting low income and trying to find a mortgage solution (purchase or refinance). In the world of mortgage lending this is known as STATED INCOME. GLM has a full ebook on this particular topic that is free for you to download at any time.
Finally, and perhaps the easiest piece of advice is to stay organized throughout the year to avoid a mad rush to the finish. Save your business receipts by category. A sample checklist can be found in the image below.
By staying organized you can easily input the amounts into your tax program and ensure that you did not miss any possible expenses.
- The Must-Have Tools To Do Your Taxes
When tackling this project there are 5 things to know/do:
- Know when your return date is due on: April 30 is the deadline to have your paperwork in and completed.
- Have a T1 adjustment form ready in case you notice a mistake after filing. You can also request changes online under the “My Account” option on the CRA Web site
- Collect all of your forms. If you are missing any contact CRA to order.
- Use a reputable tax program. Recommended ones include:
- Turbo Tax
- H&R Block’s software
- TaxAct
- Contact CRA should you have any questions at all relating to your tax return. Below are the various ways to get in touch with CRA.
- CRA Web site– good for basic information and general inquiries
- Have an income tax question? Call 1-800-959-8281.
- Wondering where your refund is? Call 1-800-959-1956.
- Waiting for your GST credit? Call 1-800-959-1953.
- Waiting for your Canada Child Tax Benefit or Universal Child Care Benefit? Call 1-800-387-1193.
To wrap up our secrets of filing your own taxes, the last piece of advice to consider is one of common sense. If you have a fairly simplistic return and have stayed organized throughout the year doing your own taxes may be a great option for you. The resources and information in this article can help you get started and file on time and correctly. However, if you have a complex return including investments, investment property, or are an owner of property it is highly advised to bring in the professionals. The cost of hiring a pro is a small price to pay to save yourself the headache of a potential audit in the future.
