EQ Bank Savings Plus Account

How do You do your Taxes?

in CRA, Income Tax, Interest Rates

I still use QuickTax to do my tax returns and those of my direct family. I find it a useful tool, but my bet is other software solutions might work just as well, but I am comfortable with this tool, so I keep using it (I am a creature of habit).

Typically I do my taxes over about a 1.5 month period, while the various tax receipts and such arrive at my house. Typically the methodology followed would be something like:

  • Buy Quicktax (although this year I could have had it for free, darn!)
  • Update Quicktax (this is iterative, because there seems to be new updates every week, and then as tax season comes near an end there seems to be an update every day or so)
  • Create this year’s tax returns for my family, based on last year’s Quicktax files, this manages to bring forward a lot of useful info like personal info, and also Rrsp limits and such, so I don’t have to reference last year’s returns from the CRA, just run the utility and start from there
  • Go into Quicken and glean out whatever information I think I can get, and do a rough estimate of what my taxes might be. Inevitably I overestimate how much tax I have paid and I start getting delusions of large tax refunds, but that is soon remedied.
    • Quicktax does have an import from Quicken tool, however, every time I use it, it really screws up a lot of things, because I don’t have my Quicken set up correctly, so I typically do this by hand.
  • With this estimate I will see if there is a need to buy RRSP’s to lower tax owed, which usually is not the case
  • As each receipt and/or T-4 or such arrives I then type it into Quicktax and watch my estimate become a closer to reality number
  • Over this time I will remember things I have forgotten to input like the cost of my safety deposit box, or my kids bus passes, and I will add them with glee seeing my refund number inflate.
  • By the time the first week of March rolls around my return is 95% complete and factual (i.e. not based on estimates), and I can start thinking about E-Filing my return, however, this year I printed out my return first to have a look at it, and found a few “oddities” that I am not sure where they came from, so now I am chasing them down to find out why.
  • Finally I have to decide whether I feel confident enough to submit my returns via E-File, it usually happens on a Sunday morning, when I get a sudden burst of enthusiasm and it all gets done. One year there was a problem with my data that I had to follow up with the CRA (it actually stopped me from E-filing), but hopefully this year will not be one of those years.

And Then?

With that, I await to see whether I forgot something (inevitably a receipt will appear near the end of March, which I have forgotten about), or whether I made an incorrect assumption, when the CRA sends me their response to my submission. Most years it has been spot on, which makes me very happy.

Anybody else do their taxes this way? Did I miss something?

{ 5 comments }

  • as March 6, 2010, 10:49 AM

    The TaxChopper extra deduction mentioned by Neil’s comment had to do with the foreign tax credit, see this post in the Canadian Financial DIY blog:

    http://canadianfinancialdiy.blogspot.com/2009/03/taxchopper-formerly-cutetax-living-up.html

    Fun reading, especially the comments…

    Reply
  • Neil March 4, 2010, 10:32 AM

    I don’t so much cry about the amounts paid – overall, I get enough deductions that I figure I’m consuming enough government services to consider it reasonable value.

    What I cry about is all the other Albertans who are convinced that we have lower taxes than the RoC. (This is only true in the highest tax brackets.)

    Reply
  • Michael James March 4, 2010, 6:49 AM

    In your income tax procedure, you forgot the step where you look at the total taxes paid for the year and cry.

    Reply
    • bigcajunman March 4, 2010, 7:33 AM

      Very true, I think it’s implied throughout the procedure, but yes, that needs to be added as well, possibly as the last step, once I know exactly how much I paid in taxes.

      Reply
  • Neil March 4, 2010, 2:10 AM

    This seems like a lengthy process. I also use quicktax (and have been using it since it was pretty much the only game in town), but I just wait until all the forms I’m expecting are in, then sit down one Sunday morning and spend the next 3 hours doing taxes. Most of the time is spent calculating medical expenses and figuring out which ones have been reimbursed and which ones haven’t. Time well spent, though, since medical expenses are usually about 1/2 my refund. I’ll then wait a week or so to file, just in case something I’m not expecting arrives.

    If you’re interested, Canadian Financial DIY did a comparison of web-based packages last year, and found that TaxChopper got him the biggest refund. He contacted CRA about the variations between programs, and they tested and found the larger refund to be completely legal, and the result of better optimisation, specifically dropping a little known deduction into a box that doesn’t sound right, but is. There’s several posts, the summary is this one:
    http://canadianfinancialdiy.blogspot.com/2009/03/review-and-ratings-of-web-tax-software.html

    Reply

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