Toronto ON – Are you someone who procrastinates at tax time because gathering your papers together is an onerous task, or you aren’t sure what information to include on your tax return so you don’t do it? Revenue Canada reports the average refund will be more than $1,500 for 2011. That’s a nice windfall especially if you need the money to pay down any debt.
“Keeping paperwork organized so you can review it and adjust your spending is an important component of budgeting,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada, Inc. “As well, documentation that’s easy to find, such as medical receipts or T4s, will make filing a tax return much easier.”
Another way to overcome the fear of filing is to find the right advisor, such as a trained credit counsellor or Chartered Accountant, for your financial needs. S/he can teach you how to manage the paperwork in a simplified manner and, if you choose, a Chartered Accountant can act as a buffer just in case of an audit.
“As a financial psychologist, otherwise known as an accountant, my role is to ensure clients are in control of their financial affairs,” says Alan Wainer, partner, Soberman LLP, Chartered Accountants. “I have taken on clients who previously had not filed tax returns in years. The fear of filing lead to procrastination, but at some point they understood they had to face the music.”
Being organized will help to maximize your refund. Consolidated Credit suggests the following method:
- Identify one place in your home for document filing.
- Prioritize documents making sure you have everything handy in case of an emergency.
- Categorize files based on your household budget and personal financial information, such as:
- Pay stubs/T4s
- RRSP statement(s)
- Income tax (ie. charitable receipts, medical/dental receipts, etc.)
- Credit card receipts and statements
- Cell phone bills
- Grocery store receipts
- Rent/mortgage/line of credit
- Review the files, purge or relocate outdated information, and update information as needed.