Bringing Tax Time into the 21st Century

This past week, my employees received their T4 slips for the 2013 tax year. As filing taxes became a topic of conversation among staff, I was surprised to learn that people still rely on some old-school methods to organize documentation and file their personal taxes. I’m not a tax accountant, so I’m certainly not even going to try to give anyone advice on the technical and legal aspects of filing their taxes. However, I do have some ideas on how to make filing taxes just a little less anxiety-inducing with the use of technology.

Collecting and Storing Documentation Throughout the Year

Throughout the year, you collect various pieces of documentation that you’ll need to refer back to for tax time. For example, as a business owner I need to save a significant portion of my receipts. You might need to hang on to receipts for public transit, or office equipment and supplies if you’re a freelancer. Whatever the case may be, there’s a good chance that you’re storing all this documentation in an inefficient and disorganized way, like in a shoebox. While this is easy throughout the year, just toss your receipts in as you go, it makes tax time miserable because you have to sift through piles of receipts and organize them. It also takes up space in your home or office and leaves these items vulnerable to being lost. So what’s the high-tech solution?

Well you have a lot of options here, you just have to try them out and figure out what will work best for you! For receipts, there are a ton of apps out there that allow you to snap a photo of your receipt and file it away in a safe and organized way. Shoeboxed is just one of these apps that is worth looking into. Another method is to scan you receipts and documentation throughout the year and file it away on your computer—with a back up either in the cloud or an external hard drive, of course!

Preparing and Filing Your Taxes

If you’re still making the trek to the post office to pick up the paper booklet used for tax returns, consider this your intervention. Not only is this unnecessary but it sucks up a lot of your valuable time. There is a reason the CRA stopped sending you that package in the mail, it’s because they recognize that there’s a better way!

Now that we’ve gotten that out of the way, let’s look at your options for filing a paperless return. If your taxes are simple, for example if you’re single and don’t have any complicated investments, filing your taxes paperlessly will be like a very short walk in the park. In this case, I recommend you choose some software, like UFile or TurboTax. With a simple return, it really won’t matter too much which direction you go. This software allows you to choose from a desktop version or an online version. That is, you can either install the software directly to your computer or you can do it all online!

If your return is a bit more complicated, if you run a small home business for example, you’ll have to look at some of the more advanced versions of TurboTax. Of course, if your return is very complex, you might still need to defer to a professional accountant for help.

I’ve Successfully Filed My Taxes! Now what?

The CRA requires that you hang on to the documentation for your taxes for up to seven years, just in case they need to audit you. This is where even those who were early adopters of online and desktop tax software tend to something that I find really amusing: they print out their return and file it away in a drawer or filing cabinet. The reason I find this amusing is that it’s unnecessary and defeats the point of using paperless methods to file taxes.

Once you file your taxes, there are some excellent ways to store them and keep them for years to come. Best of all, these options don’t require storing any paper! Firstly, there’s the simple option of saving your returns on your computer—just make sure you note the tax year in the file names so you can easily refer to them later. It’s also wise to store this information in a folder that is password protected. Of course, you know that you should back up your computer, which means that a back up for those files will exist. However, I recommend creating a storage system outside of your home or office. You could put important documentation, such as your tax return, on a hard drive and store it in a safety deposit box or at a family member’s house, for example. This protects you from losing all that valuable data if your home were to be hit by a disaster such as a fire or flood. Another option is to look into some secure cloud solutions for storing this data.

No matter what your situation, there’s a solution to your tax filing woes. You just have to explore some of the options technology provides.

By Mike Agerbo

March 04, 2014