Overcome the fear of filing

Are you someone who procrastinates at tax time because gathering your papers together is an onerous task, or you aren’t sure what information to include on your tax return so you don’t do it?  Canada Revenue Agency reports the average refund will be more than $1,500 for 2011. That’s a nice windfall especially if you need the money to pay down any debt.

One way to overcome the fear of filing is to find the right advisor, such as a trained credit counsellor or Chartered Accountant, for your financial needs. S/he can teach you how to manage the paperwork in a simplified manner and, if you choose, a Chartered Accountant can act as a buffer just in case of an audit.

I spoke with Alan Wainer C.A., partner, Soberman LLP, Chartered Accountants, he views his role “as a financial psychologist” and works with his clients to ensure they are in control of their financial affairs. Wainer says, “I have taken on clients who previously had not filed tax returns in years. The fear of filing lead to procrastination, but at some point they understood they had to face the music. With my help, clients are able to work through the process of filing and know what to expect with their tax reassessments. Often results are better than expected, and the sense of relief is enormous.”

Whether you do it yourself or work with an advisor, keeping your paperwork organized will help to maximize your refund and minimize your frustration at tax time. Consolidated Credit suggests the following method:

• Identify one place in your home for document filing.

• Prioritize documents making sure you have everything handy in case of an emergency.

• Categorize files based on your household budget and personal financial information, such as:
    • Pay stubs/T4s
    • RRSP statement(s)
    • Income tax (ie. charitable receipts, medical/dental receipts, etc.)
    • Credit card receipts and statements
    • Cell phone bills
    • Grocery store receipts
    • Clothing
    • Insurance
    • Rent/mortgage/line of credit
    • Tuition

• Review the files, purge or relocate outdated information, and update information as needed.

Jeffrey Schwartz is the Executive Director of Consolidated Credit Counseling Services of Canada and President of the Credit Association of Greater Toronto (CAGT). Consolidated Credit is a national non-profit credit counselling organization that teaches consumers about personal finance through web-based budget and debt analysis tools, financial literacy community outreach programs and in-person or telephone counselling. CAGT is a non-profit association with a mission to provide a dynamic forum in which members can share information and expertise.