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| Financial |
 Budgeting
For Tax SeasonBy Debbie Patterson, owner of Odessey Business Services Well it's that time of year again where we are all budgeting for the holidays, both our time and money. I can imagine that tax season is probably the last thing on all our minds. April is still a half a year away! However, trust me, there is no better time than now to plan, budget and prepare for tax season. Now, I'm not talking about physically tallying the receipts up yet (we'll save that for January). Take stock of your financial life and answer your New Year's resolutions now. Do you want to pay some of your big bills down? Put more money away for your retirement? Do you have new children or grand-children in the family that you want to put money away for their futures? Are you thinking about taking classes at night or starting a second job? Are you giving some thought to turning a hobby or side job into a career? All of these questions are best planned out now, while both you and the professionals who can help you are not so busy. Stocks, RRSP's, RESP's or any other kind of investment are better invested now then in the spring. Why? Simply because you will start getting the interest now. Meet with a financial advisor or spend some time learning about the different investment opportunities available to you and your budget. The stock market is still a viable option, even with the results in the market since the terrorist attacks in New York. Buy now and buy low, as the markets are still going to rebound as they have after every major event in history like the one on that took place on September 11th. Take advantage of the some capital losses you may have in your portfolio. You can use losses from this year on past gains which were taxed at a higher rate or future capital gains while using the proceeds from the sale for another form of investing or a paydown of debt. RRSP's are always an option and don't have to be locked in for a long term. Shorter terms are paying higher interest than long terms and that leaves you an option to diversify your investment once the markets are starting to rebound. RESP's are for your family's future and some are even set up where the government will match a percentage of your contributions. The benefit to contributing to these programs now is that you aren't rushed into finding out what they are and how much to contribute on February 28th. Plus the interest starts building now. It is better to contribute to RRSP's and RESP's on a monthly basis rather than in a bulk contribution once a year, for interest purposes. If you are self employed, or are looking at that avenue in the near future, take some time to meet with a professional who can help you with the set up and organization of your business. A basic set of books or spreadsheet tailored to your business is going to save you time and money come tax season if you are organized. It is in your best interest to know exactly what you can use as a deduction for your company so that you don't throw out valuable receipts. Most tax preparers, bookkeepers and accountants are going to have time before Christmas to take a detailed look at your situation, whereas in the New Year it is so busy in their industry that you may not be getting the personal attention you should be getting. Now is the best time to get ideas and solutions and even to re-evaluate your past personal income tax strategies or the set up and maintenance your books without being rushed or under a lot of stress. You can cover some of those relevant questions, such as should you incorporate or not and why or what can you write off for your particular business or how much of your home can you use in your company - questions that are usually overlooked year after year because we are always rushing to 'just get it done' at the last minute. So even though it is only November, it's not too early to Christmas shop and it's not too early to prepare for income tax season. Only a few minutes of your time could save you ten times that as well as money in the new year, let alone give you some idea what your financial position might be as tax season approaches. Debbie Patterson is the owner operator of Odessey Business Services, specializing in income tax. Visit her website: www.odesseybusiness.com for more tax tips or contact her directly at 403.816.5098 |