Now that the calendar has turned from 2012 to 2013, it’s time to get ready for filing your 2012 taxes. There is no better time to start getting ready than today! Below you will find some suggestions to help you get started with all of your End-of-Year reporting and tax requirements.
Right away, it never hurts to set up a meeting with your accountant early enough so they still have time to spend with you. Your accountant will be able to asses your fiscal situation and advise you on things such as your retirement plan, charitable contributions and other deductions that might lower your tax bill, either for 2012 – like making RRSP contributions, or things you can arrange early in 2013 to get you up and running for the year.
Before you meet with your accountant, however, there are some things you should gather and have ready for the meeting:
- Property tax bills for the year – especially if you use any of your home for business, then you’ll need to know the approximate square footage of your home and the room(s).
- Letters and receipts relating to charitable donations made in 2012, which must include the monetary value of your gift to the organization, the date and year of the donation and that organizations charitable number (meaning they are legitimate).
- Relevant reports from whichever of the online bookkeeping tools you are using to capture data. Be sure the information is accurate and up-to-date.
- If you hand-write your checks, make sure you have all your receipts and that they are detailed enough to categorize the expense.
- Medical deductions for the year, if you qualify.
- Retirement Account information – are they maxed out, have you stayed within the amount available?
- Bonuses and Gift(s) information – Keeping in mind that employers tend to show their appreciation to their employees by issuing bonuses / giving gifts towards year-end and these are considered taxable benefits.
- Insurance – Now is also the time to review all of your insurance policies. Life insurance, health insurance, even homeowner’s insurance need to reflect your life situation accurately. Major life changes like marriage, divorce or the arrival of a new baby (or 2) require changes in coverage. A new job that requires you to travel for business means you have to change your car insurance policy.
Your accountant should also be able to help you keep track of what you received last year in the way of slips and returns and thus advise you what to expect this year and when it should come so that you don’t have to wait until the last-minute to file.
You should also get a box or magazine box and set it up in your office for all the tax information to reside in until you need it at year-end. There is nothing worse than forgetting to gather something or losing a record at year-end.
End-of-Year preparations don’t have to be stressful and if you need a little more help, you could always hire a bookkeeper to reconcile your chequebook / online purchases with your bank statements among many other things which can simplify your life by keeping your data organized, which ultimately saves time for your accountant (and that saves you money!).