Common Mistakes People Make When Handling Their Accounting and Tax
Managing your accounting and tax involves more than maintaining books for tax purposes. Precise accounting plays a critical role in helping you save money, boost profits, identify areas that deserve budget cuts and those that need added resources. However, with the accounting and tax rules changing every now and then, maintaining your accounts and doing your taxes with precision can be challenging. Moreover, even the minutest errors could lead to heavy losses and put you at risk.
This is where the best accounting and tax professionals come into play. Certified Accounting and Tax Consultants assist clients in resolving their accountancy and taxation issues swiftly and efficiently without making common mistakes that most people make with their taxes. To ensure you make the best decision for yourself, Mark Houghting has got you covered! Read on to learn about the most common mistakes people make when handling their accounting and tax.
1. Think that they don’t need to file on time because they have a refund
Clients believe that a refund is money in the bank and gives a free pass on filing. Some credits expire, like EI overpayments are limited to three years. Why let the government use your money; it is better in your pocket.
2. Not keeping receipts and tax returns for 7 years
Clients may think that their receipts do not matter once the return is filed. The tax authorities demand you keep tax returns and receipts for 7 years. The tax authorities do and can audit your return and without receipts, you can lose money.
3. Not filing as a couple
There are tax credits that can be shared, so it is worth it to file as a couple, especially if you have children. Since your marital status has a sizable impact on your return – family incomes are merged for calculating income-tested benefits, such as the GST/HST credit or the Canada Child Benefit. For couples, combining charitable donations and medical expenses is an advantage.
4. Not seeking tax advice
Tax codes change and while you may use software to prepare your taxes, there are items that you may need help on, like capital gains. If you have something different happening with your taxes, reach out and ask questions. It is easier to file correctly than trying to correct an item that has been filed.
5. Ignoring the tax authorities
If you receive a mail from the tax authorities, read it and if you need help call. If you are in the collection, make sure you do what you say; call the collection department and let them know if things change. You ignore the tax authorities at your own risk. They have all the power and can cause havoc in your life.
6. Filing your return late
Taxes are due on April 30th and not filing on time can delay payments and credits calculated on your return. These include the climate action plan, child tax benefit, GST refund, and Ontario’s Trillium benefit. The key to minimizing or doing away with errors is to devote about fifteen minutes a day to get some of the accounting work done so that you don’t have to spend hours or days later and risk filing the returns late.
To avoid these and other mistakes people make when managing their accounting and tax, get in touch with Mark Houghting - CPA in Almonte, Ontario.
I have been a Chartered Professional Accountant for many years and have worked in various businesses before starting my own accounting and tax practice. My experience allows me to ask the right and sometimes tough questions about your tax situation. I believe clients should understand their situation and how taxation works in their specific situation and tailor a solution to meet those needs.
I offer Accounting and Tax Services including Corporate Tax, Personal Tax and Estate Tax Services. I serve clients across Almonte, Kanata, Carleton Place, Stittsville, Arnprior, Perth, and the surrounding areas.
To learn more about my services, please click here. If you have any questions about your accounting and tax requirements, feel free to get in touch with me by clicking here.