Sunday, March 27, 2011

Crunch those numbers... it's tax time!

I was not looking forward to doing my taxes for 2010 as for my 2009 return, I got myself into an administrative mess with both governments. I filed on time, but I realized 10 minutes after hitting the “submit” button that I made a typo on my RRSP contributions. All of a sudden, I was having flashbacks to my grade 2 math class when my father made me promise that I wouldn’t hand in any test to Mrs. Easson until I had corrected at least 5 mistakes. I’ve always struggled with proofreading. Last year, I learned a time consuming lesson as it wasn’t until January (9 months later!) that I finally received my correct refund.

This year, I vowed to make a list & check it twice (or thrice) before submitting my taxes. And you know what? 60 minutes after loading up my UFILE and sitting down with my forms, I was done and toasting my $530 refund. While $530 is not a major amount of money compared to my previous years ($2030 and $1900), there are many silver linings:

1. I’m finally being taxed appropriately with each pay-cheque and not overpaying my taxes. While I appreciate social services, I’d rather be investing my money on a monthly basis earning a return – not letting the governments have it.

2. It also means that I maximized my RRSP contributions for 2010.

3. I also made $250 of charitable donations last year, bought a monthly transit pass and paid $1700 in tuition (a personal expense) to finish up my graduate diploma in PR & Communications last year. These 3 items also helped to drop my personal income and lead to a refund.

I plan to put my $530 into my investment account. While I have my RRSPs, I have not started playing the stock market game and this is my next financially fabulous goal.

Untaxing tips & tricks:

Since taxes does not scream "for a fun time call", here are some of my suggestions to alleviate the stress:

Organize your paperwork. Put together a pretty folder (mine is pink, obviously) with a copy of last year’s Notice Assessment and your user/password information to file online.

Grab all the tools that you might need. Mine included a Swarovski crystal pen to check off each little box from my forms each time I entered the number on the software and my beddazzled rhinestone calculator (pictured above) just to double check that the computer was right.

Write a topline list of where all your money went last year and search out those forms before your tax-filing day. By checking my 4-week rolling budgets, I realized that I was missing one charitable donation and was able to quickly find a receipt through my email.

Buy tax prep software. Pen & paper is old school and do-able, but for $20 at FutureShop, UFILE will guide you through the process and the help button is ideal for clarifying the different credits that you may (or may not) be eligible for.

Eliminate distractions and give yourself 2 hours to get it done. It will likely take less time, but you don’t want to feel rush. Initially I was watching Say Yes to the Dress while doing my taxes, but I found the gushing of the brides to be distracting. I worked in silence instead.

Make yourself a latté and pour glass of iced water. You might as well pretend you’re at a chic bistro instead of your dining room table on a sunny Sunday filing your taxes. When you’re done, you can go for the wine (or champagne) to celebrate. Bonus points if you put on a World Music French Cafe CD.

Grab your favourite nail polish and give yourself a manicure since you're not going anywhere for awhile. You’ll be doing minimal typing (be gentle!) so you might as well take the time to give yourself a coat of colour too.

Don't hand in your taxes until you've proofread it. This is the kind of test you want to get 100% on.

Happy tax time!


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