Tax deadlines are approaching in Canada and the United States. In Canada our taxes are due on the last day of April, while in the United States the 15th of April is the usual deadline. For those of you who do your taxes on time, you spare yourselves the stress and frustration of filing late or getting your tax filing in at the last moment. If you owe money and you are late, there are tax penalties that will cost you more money than you are already paying.
There are many millions of people who go down to the wire either because they are missing some key piece of data or they just procrastinate and leave it to the last minute. Either way, most consumers will benefit by being organized and taking full advantage of all of the deductions that are legally allowed by their respective governments. The best time to do an initial tax assessment is before the year end so that if there are last minute tax adjustments you want to make to reduce your taxes, you still have time to take those steps.
This is often the big dilemma for many consumers. The fact of the matter is that unless you have a simple straightforward tax form to fill out, you are likely going to miss a deduction and pay more tax to the government than you should. There also may be deductions which you are eligible for, but have not even heard of. The tax laws change every year and as a non practicing accountant it is very tough to stay current with all of the new laws and deductions that might be available.
If you are not good with numbers, do not have the time, or just feel intimidated by the complex tax forms, they you are probably better off to do your taxes in advance with an accountant. You may have to pay a bit more for his or her fee, which by the way is tax deductible, it can be well worth it and you will not have the stress of wondering if you are going to be audited due to a simple mistake.
Note that if you suddenly decide a month before your taxes are due to use an accountant, you may have a difficult time to find an accountant to take you on as an account. They are extremely busy at this time of year and usually have a full list of customers that they have already committed to in terms of completing their tax filings.
They may take you on, however they may specifically not commit to completing your filing on time, which puts you in a real difficult situation should your return be late and subject to penalties.
Talk to your prospective accountant early in the year and begin tax planning now for this year and for next year with the idea of minimizing your income tax payable. Why so soon, well sometimes you need to make the expenditure, the RRSP investment, the 401K investment in the year you want to deduct and it may take some commitment and savings on your part to meet these deadlines. Planning ahead and knowing exactly what you are going to do well in advance is much easier to accommodate and takes the stress of you.
It all sounds good, but sometimes it is really difficult to do and this is where your tax planner can help you by reminding you that you must make dome deposits etc to prepare for your taxes.
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