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& DeductionsBy Debbie Patterson, owner of Odessey Business Services Now, I realize it's not even Christmas yet and the last thing we all want to think about is taxes, but, the motto we first learn as children is BE PREPARED. If you break down your tax preparations into a few hours or less a month, come February or March you won't be putting that overstuffed shoe box and Safeway bag into the closet until April 29, when ‘I-suppose-I-should-deal-with-my-taxes’ time comes. Why put yourself through the stress? Calgary is in the forefront of home business. Many people do odd jobs on the side, have taken a hobby to a new level and are making money from it. Others have spent many years working at a full time job with nights and weekends doing side jobs to finally get enough clientele to go out on their own. The point that I am getting at is that, for this last group of people, taxes can be, well, taxing. I am about to throw out a few ideas that won't take much time, but will help you be more prepared for taxes and allow you more time to look at tax planning for February 28th. First, many people work a regular job and have a basic tax return. There are a few things to make sure of, even for a simple return: Did you move during the year? Notify previous employers of any changes so that you are not scrambling for a missing T-4. Also, notify Revenue Canada in case you collected Unemployment Insurance or government pension payments. I have completed returns with refunds due, but the assessment came back with an amount owing because the tax payer forgot they received Unemployment Insurance benefits. Make a list of the jobs you had so that when you prepare your paperwork, you know that you have all the necessary paperwork from each job. Did you go to school? Keep your tuition receipts. Even if you can't use them to benefit your tax return, they can be used the following year or transferred to a spouse or parent who can use them. If you are finished school and are paying on your student loan, get the bank to issue a statement of the interest you paid on your student loan. Did you work one or more part-time jobs? If you work at a job for less than 15 or 20 hours per week, chances are you are getting the minimum, if any, taxes taken off your cheques. This might not be a big deal for that $120 cheque you receive, but 12 or 15 of those can mean that at the end of the year you will get a T-4 for $3000 earned and no taxes taken off. This can be a big disappointment that can be avoided. Ask to have extra taxes taken off; it's your decision. This is also an option if you work full time. Most computerized accounting programs take off the minimum tax required, so even $20-$50 per month extra taxes taken off could result in a return of a few hundred dollars. Now, for proprietors and home business owners, as well as commission salespeople: Organization is the
key. Get some files or envelopes together and separate your bills and
expenses by category. Don't forget your home expenses: insurance, utilities, rent or
mortgage interest, property taxes and condo fees. Some home repair expenses can be used as
well. For example, if you renovated your basement to make an office. |