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Good Reasons For Being Organized with Your Taxes

keep your taxes organized

So, why should you be organized for taxes?  This is something that everyone has to worry about, whether you run a small business or are self employed or are simply doing your taxes for yourself.  Making a mistake on your taxes can be absolutely devastating for anyone, and the only way to avoid this fate is to get organized and stay that way.  Even if you do not make a mistake, and you file your taxes without any kind of problem, being organized is like a gift to yourself.  The stress from dealing with taxes while being un-organized may drive you completely nuts!

What are the chief dangers if you are un-organized?  Well, making mistakes on your taxes can lead to unpleasant results, for example being audited, which is a nightmare for anyone or any company.   The stress that this can bring to the owners, and by extension the employees under them, is difficult to quantify.

However, if your company, or you yourself, are well organized, with proper business receipts all filed in areas that are easy to access and look through, you are saving yourself or your company a significant amount of grief.   This allows you, or your employees to worry less about an impending audit and worry more about keeping yourself afloat or the company profitable.    An organized individual/company, will have a significantly simpler time, not only in initially filing their taxes but also in relation to any fallout from filing the taxes.

What does being organized mean?  HAVE YOUR RECEIPTS.    Also, make extensive notes if you are claiming a large amount of money in business expenses.  This is especially true for the self employed, for example a real estate agent.   This involves a lot of driving, phone calls, meetings with clients, etc.  All this can be claimed as a business expense.  But, without receipts and supporting documentation, the courts will not simply take your word on the subject.  You must prove that everything you claim is a legitimate business expense.  Best way to do that?  Be organized.  Make notes on your receipts, keep track of everything, let nothing slip through the figurative gaps.  Plus, using the services of a quality accountant can make the tax process a whole lot easier.

If you are able to keep excellent records and receipts, taxes can be a breeze, even if you are audited.  There is no reason to fear tax season if you are well organized and prepared for the possibility of an audit, and that is quite simply the best reason to be well organized for tax time.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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The information provided here and throughout the site of TorontoAccountant.CA is intended for general tax information only, and should not be misconstrued as a legal source of information regarding your tax situation, or be used for any other purposes other than for general information.
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