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Discount the expense of taxes

WOW!! – It’s that time of year again!  The flowers are blooming; the birds are singing, and the weather is nice. Some people, however, are pulling their hair out!  Why? It’s also tax time.  I know firsthand how people can be overwhelmed at this time of the year with getting financials and other tax documents ready for their accountant.  Items get lost or disorganized in the rush and then the accountant’s team has to spend even more time getting documents in order and that can cause your cost to go up with your accounts’ services. 

If you find yourself getting lost when you’re gathering and preparing documents for your accountant, you’re not alone!  Taxes are notoriously complicated, especially if your documentation is not organized. 

To help you get our documents organized and ready to take to your accountant; I contacted several certified public accountant acquaintances and gathered a few tips to help you out.  Hopefully, they will save you time, money, and stress.

Ready… Set …Organize!

Top three pro-tips for organizing your tax documents:

  1. Group-like documents. If you’re submitting paper documents, clip together receipts of the same type (e.g. medical expenses, charitable donations, etc.). If you’re submitting digitally, save scanned documents of the same type into single PDFs, rather than sending one file per page or one massive file. 
  1. Make detailed labels and notes where possible. Whether it’s giving digital files intuitive names (e.g. RRSP-Contribution-Slips-2021) or using sticky notes to label stacks of paper, the less detective work your accountant needs to do, the lower your fees will be.
  1. Check that everything is legible. As you sort through digital or paper documents, take a moment to make sure that your certified public accountant will be able to read everything that you’re providing. This is especially important if you’ve submitted scanned or photographed documents.

Three most common and costly mistakes certified public accountants see their clients make when submitting tax documents: 

  1. Not including everything that the accountant will need to file the returns.  If your accountant is missing information, they will need to go back to you for it.  This takes more time for them and is an added cost for you.  Then you will have to go and find what they are needing.  
  1. Providing insufficient information on investments. Clients will provide only the tax slips when the more detailed year-end report is what your certified public accountant really needs.
  1. When submitting documents digitally; the document is not identifiable by the name so they have to spend time opening many documents to locate the one they need.  

Your accountant will most likely provide a resource guide for gathering your documents.  Also, you will know what is needed from what has been needed in the past.  

If you are totally overwhelmed, don’t wait until the last minute to ask for help.  There are Professional Organizers who can help you get your financial documents organized and help you set up a system for managing all of your documents all year so that when tax time rolls around again you can be enjoying the flowers, sunshine, and your favorite drink.

If you have some time-saving organizing tips that you use please share them with us and let’s help each other out.

4 Comments

  1. Organize on the go. If you do not have too much you can use just one file and deposit all tax receipts or other tax related paperwork into it. At the end of the year break it down into categories for the CPA as stated above. If you have tons, have a TAX section in your filing cabinet with large, clearly labeled tabs and put your receipts, etc. into the correct file every time. This will save time and effort in compiling the information at tax time and help you get it to the CPA earlier, which, if you are looking for a refund, means a lot!

    1. Hi Linda,
      Thank you for this great tip! I love the part about clearly labeled tabs. I have seen so many of my clients use tiny print, and/or don’t clearly state the contents. And the biggest key is to put your receipts, etc. into the correct file every time. That is key to maintaining any system.
      Thank you again for this great tip.

    1. Hi Kasey;
      Your welcome. I hope at least one of them helps you. If you have any tips please share them, we all can use tips to help us with our taxes.

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