There are many simply ways to reduce the time, and therefore cost, of preparing your personal tax returns without having to have any knowledge of tax.
Accountants frequently charge based on the amount of time it takes to complete a tax. If you organize your documents in a logical and efficient way, your accountant can process your documentation quicker and therefore spend less time on your return, which should translate into a lesser bill. Below are some common mistakes clients make that add to the cost of their return:
· Open your envelopes: If you do not open your mail from the government, small dividend cheques, etc, then someone will need to spend time to take each piece of mail from its envelope and read each item to determine if it is useful or not.
· Extra Information: Do not provide clutter to your accountant. Only provide documentation that is related to your tax return. If you are an employee and have a T4 slip, your accountant likely will not need a pile of your pay slips.
· Do Some Work Yourself: If you are self-employed, why not prepare an income statement. If you tally all your expenses and turn them into an income statement, an accountant can quickly enter your information and notice what expenses you may have missed.
· Totals: Many people summarize their self-employed expenses, medical expenses, etc on a spreadsheet and do not include a column for the total. This will cause someone to have to manually add up your entire column of numbers. By including a total column for each expense on your spreadsheet, it will certainly help to reduce your accountant’s time.
· Multiple Drop Offs of Documents: If you are at your accountant’s office two, three, even four times to drop off papers you forgot to include, expect a higher bill. Every time someone goes into your file to keep entering in information you forgot, the time will increase and so will your bill. Perhaps make a list of all the items you give to your accountant and refer to it each year before you drop everything off.
· Organize your papers: Separate your tax papers into piles by type of document. For example, keep all the donations together in an envelope (or better yet, add them yourself and give the total to your accountant). Keep medical in another separate area. Keep children fitness receipts in another.
· Stapling: A way to reduce time on your file is to avoid stapling all of your documents together. Accountants frequently make photocopies of your slips in order to keep a copy for you, themselves, as well as provide a copy to the government (if paper filing). If all your documents are separated into stapled piles, someone will need to remove the staples from all your pages in order to make photocopies. Simply use paper clips das a faster alternative.
· Multiple Family Members: If you are providing information to your accountant for several people in your family, ensure that your documents are separated by individual. It will be much faster for the processer to enter your returns and not have time spent sorting which papers belong to which family member.
· Use a Professional: It may be initially cheaper to use a tax preparing software or go to a booth in the mall to prepare your return. However, these methods do not often have the knowledge to maximize your refund or know how to help you avoid being a target for an audit. An accountant will know what credits or expenses you may be missing, how to determine which spouse claims which expenses and will be able to help you avoid (or help you through) a tax audit.
Employing these strategies will make completing your personal tax return easier for you, and your accountant!
No comments:
Post a Comment