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.
website: www.brendachapman.ca
Twitter: brendaAchapman
Facebook: BrendaChapmanAuthor
Blog: brendachapman.blogspot.com
A good system, Brenda. I think what really got me organized for tax time was going one year not being organized.
ReplyDeleteI know the feeling, Dietrich. A little prep goes a long way to avoiding the panic :-)
ReplyDelete