Pamela Johnston of Redefining Success30 minutes to organizing your taxesTax time is upon us and, if you’re anything like I used to be, you’re pulling out your hair trying to steal the time to pull together WHO knows what from WHO knows where. Are you dreading making the list of all the receipts that you’re missing and all the people and companies that you have to call?

Like many things, I got so sick of the wasted time and I vowed to stay organized for tax time all year round.

I’m going to share that with you now.

There’s no time like the present to start a new habit, particularly since you are right in the middle of figuring out what it is you need to keep track of.

  1. Go out and buy yourself a couple of accordion file folder boxes – the ones with the handle at the top.
  2. As your monthly bills, bank and brokerage firm statements roll in, file them under the relevant month.
  3. Over the course of the year, if you get any tax related expenses like RSP contributions charitable donations, anything that you know you’ll need for tax time, put them at the back of the box (Get in the habit of chasing down that charitable donation receipt when you’ve made the donation rather than waiting until next March. Then you know you have it all in the back of your box.)
  4. File things like car or home insurance or other once a year expenses at the back of the box.
  5. Mark down the mileage on your car odometer on an envelope at the beginning of the year and put that in the back of the box. Then, throughout the year, put the gas receipts in the envelope. At year end, write the odometer reading on the envelope. Then apply a % to the kilometers travelled that you think fairly represents the amount of travel time your vehicle was used for business purposes.
  6. Get yourself set up with financial software like QuickBooks that allows you to download your bank and credit card statements in order to track the tax related transactions on an ongoing basis.
  7. Starting in January, make sure to keep a box or an envelope available so you can collect all the reporting that will come from your brokerage, banks and insurance companies. By the end of the first week in April you should pretty much have everything that was sent to you relating to taxable investments in one place.
  8. When tax time comes around, simply pull out this box to retrieve and courier the following to your accountant.
    a) The tax related receipts at the back of your accordion file (RRSP receipts etc.),
    b) The envelope full of tax receipts from your brokerage, bank and insurance investment accounts, and
    c) E-mail editable Excel files you have created of your taxable transactions from your financial software

The accountant can organize that information because it’s an Excel spreadsheet you can manipulate and organize the information any way that they need to in order to prepare your taxes.

And that’s it.  Tax Return 2015 information filed with accountant – no problem!

It literally takes me less than a half an hour to pull it all together and send it off. And you can do it too! Good luck with tax time 2016!

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pamela johnston redefining success investment advisor portfolio manager

Pamela Johnston, FCSI
Investment Advisor & Portfolio Manager