Gone are the days where I did my taxes with pen and paper. Happily those days are over.
I use TurboTax to do my tax returns and for those of my direct family. Other software solutions work just as well, but I am comfortable with this tool, so I keep using it.
Typically I do my taxes over about a 1.5 month period. I must wait while the various tax receipts and such arrive at my house.
Typically the methodology followed would be something like:
- Purchase TurboTax, at Costco. This is usually the cheapest place to get it.
- Update TurboTax. The software does this automatically, but needs to be done. The updates are important.
- Create this year’s tax returns for my family, based on last year’s TurboTax files. The software manages to bring forward a lot of useful info like personal info.
- TurboTax allows you to import data from the CRA site. This year, it is more exciting, as I am locked out.
- Use my last pay stub for most data needed, until my T-4 arrives.
- 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.
- TurboTax does have an import from Quicken tool. Every time I use it, it has not gone well, so I eschew this tool.
- 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 TurboTax and watch my estimate become a closer to reality number
- Over this time I will remember things I have forgotten to input. 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). I can then start thinking about E-Filing my return.
- Printing the return and doing a visual inspection is done. This is done to ensure no important credits are not forgotten.
- Finally the decision whether to submit my returns via E-File. This usually happens on a Sunday morning.
- Sometimes, there are issues E-filing, so keep all receipts and take screen shots.
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.
This is a rewrite of an article from 2010.