Warning: This Could Make Tax Filing Easier

It’s that time again. You know what I’m talking about. April 30^th. It is fast approaching and that means you need to file your income tax return.  I hope you’ll be amongst those who coast to the finish line, i’s dotted, t’s crossed, instead of staggering over that line. In last place. Cursing yourself because you did it again: left all the tax recording to the last minute.

If you fall into the latter category, let’s see what we can do to get you in better shape for next year.

If it’s simple, keep it that way. If you are dealing with 8 pieces of paper of less, you can probably get away with putting all your tax slips in one folder or envelope. Label it Taxes. File it at the front of the drawer. (Remember, we don’t want you to put it in alphabetical order and integrate it with the whole filing system.  We want this to be simple). As you receive any slip that has to be accounted for in your annual taxes, take it out of the envelope and put in the folder. Done. When you’re ready to prepare your taxes, you pull out that one folder and deal with the few pieces of paper that have accumulated in there over the year. Simple.

But if tax prep is more of a paper chase, we can certainly look at ways to simplify the flow.

Go electronic. Many companies can notify you of invoice or statement delivery via email.  The PDF of that document is all you need to keep as proof, if proof is ever sought. Speak to a representative at your bank, investment firm or utility provider to learn how much information you can access via electronic delivery.

Once you access that electronic document, all you need to do is create an electronic file to save it, and assign a name to the document, so you can find it easily.  Be sure to use a consistent naming convention.

Know CRA’s rules. Do you know that you don’t have to keep original paper for everything?

“The Canada Revenue Agency (CRA) accepts records that are produced and kept in:

• paper format
• paper format, and later converted to and stored in an accessible and readable electronic format
• an accessible and readable electronic format

Records and supporting documents originally produced in electronic format
You have to keep them in an electronic readable format, even if you have paper printouts.”

Make time. If you are one of those who needs to track annual expenses, schedule a couple of hours with yourself each month to input the values you need recorded. The overall process will be more manageable when handled in monthly increments, instead of dealing with a year’s worth of paper just before the filing deadline.

Talk to a professional. Many people are able to handle their taxes without a care in the world.  But not everyone has simple accounting needs. For example, a new entrepreneur may be overwhelmed with record keeping and document retention. Even if you think you can handle preparation of your tax return, it might be worthwhile to consult a professional to learn the best way to handle your particular circumstances. It’s better to pay for an hour of time with someone who can guide your correctly, than to forever be struggling and second-guessing yourself.

Grab a Lifeline When Paper Overwhelms

Last week I helped a client to clean out her office, when we came upon a newspaper clipping bearing the same name as this month’s blog post. It was from the Careers section of the Globe and Mail and was dated April 6, 2013. This is noteworthy for a few reasons:

1.     This piece on organizing our paper flow wasn’t in the Life section, or Homes section. It was in a section about being successful in business. So, organization plays a critical role in realizing greater success and peace of mind in our career. Can you imagine the benefits to be realized in your personal life if your living and working spaces at home were organized?

2.     The lovely lady with whom I was working had waited 3 years before grabbing that lifeline (i.e. seeking help). That’s a long time to postpone our personal satisfaction and serenity. Why do we do this to ourselves?  

3.     This topic never gets old or goes away. The Globe covered it three years ago, everyone I work with, entrepreneur or otherwise, complains that paperwork makes them crazy. This is a real challenge for a lot of people.

At the time the article was published, the lawyer who was interviewed said that “having those piles of paper visible and touchable in my office were not helping me be efficient and keeping me calm and ready, but rather increasing my stress levels every time I walked into my office.” Can you relate?

To further prove the point, after getting the piles sorted out, this woman recognized that she spent less time in the office, worked fewer nights and weekends and increased her billings. Have you ever wondered what life would look life for you if the stress created from piles of paperwork were eliminated?

One of the most important tips I can offer, whether in reference to paper or a LEGO collection, is this: Only handle it once (OHIO). Don’t pile paper on your desk, committing to filing it later. File it now. Don’t put an article or research material to the side, promising to make a folder for it later. Make that folder now. The more you pile around you, the more inclined you will be to add to the pile: clutter attracts clutter. You’re the only one who can cut down those paper mountains; and let’s be honest you will feel so much better once you know what’s contained in those papers, than spending time worrying about what’s in there and how you will ever get through the task of dealing with it.