Monday, September 23, 2019

The Taxing Work - Staying Organized

How do you keep your taxable receipts? Log them in each month? Each day? Throw them all in a big pile and wait for tax time? Do you have an App that organizes them for you?

Happy Monday - Brenda here!

This week’s question tackles a necessary but not all that scintillating business topic — the organization of tax return receipts.  It’s one of those tasks that I dread but once done, I feel an immense sense of accomplishment (and relief).

At the beginning of each tax year, I label envelopes with headings: income, expenses, trips, medical. I have a spot next to my computer where I shove receipts and a few times a year, I enter the amounts into a Word document and file them by date in the envelopes. Some years, I'm better at staying on top of the receipts than others, but as the year end is December and I usually file by the beginning of March, this gives me lots of time to catch up. 

I use an accounting firm to complete and file my taxes, something that came in very handy this past year when I was sent an $800 bill out of the blue some time after I received my refund from the Canada Revenue Agency (CRA).  I contacted my accountant and she dealt with the issue. Turns out a box on the tax form had been moved or added and the CRA charged me twice for something. The point is that I didn't have to deal with the problem, which is a good thing because my gut reaction was to send a cheque immediately since I figured the CRA knew more than I, and I had no desire to get on its bad side.

One perk of being a writer is that we are able to write off a variety of expenses arising from the career. I have an office that allows me to write off a portion of our house.

my office

Trips to book conferences or for publicity events can be written off as can items such as office supplies, computers, magazine subscriptions and books. Since the average annual income from writing in Canada  is under $10,000 a year, this bit of tax relief is most welcome. The CRA does, however, want evidence that one's writing is more than just a passing hobby. The first accountant I spoke with said that in order to write off expenses, I had to produce a body of work. This hasn't become an issue since I've released one book a year as well as a novella or two since my first middle school mystery Running Scared in 2004.

I'm not the most organized person once I get immersed in a writing project (which is just about always), letting a lot of the day-to-day tasks slide - my house will never win awards for being the cleanest or the tidiest, but my occasional time investment in recording receipts and organizing them by date in envelopes has served me quite well thus far. I'm actually close to caught up this year although entering the latest receipts is on my to-do list. It's  not, however, the most pressing or exciting task on the list :-)


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Dietrich Kalteis said...

A good system, Brenda. I think what really got me organized for tax time was going one year not being organized.

Brenda Chapman said...

I know the feeling, Dietrich. A little prep goes a long way to avoiding the panic :-)