Pay your taxes – if you don’t, trust me, they’ll get you.
Tax time is a pain for me. I made a decision some years ago to handle my own affairs. Every year, I fill and file my own tax returns. My personal income tax return isn’t too much trouble. I buy the same software every year, fill out my return in about 30 minutes, then spend another half an hour or an hour double checking that I didn’t miss any deductions and such. I review the government’s Revenue websites for instance, to see if there are any changes that may apply to me – they are always scarce.
However, I also incorporated in 2006 (I’m in Canada eh), so I have to file a different tax return for my company. A little more complex. Filling out the actual forms is not that much trouble – I took some tax classes in college, I’ve read accounting books, and I bug my brother whenever I hit a road block (he’s studying to become a chartered accountant). The pain is keeping track of all these little numbers that you have to input in these forms.
Being old school, I used to keep track of everything in Excel files. While everything is well documented, it’s not necessarily documented as it should be for a tax return. I didn’t keep a journal, balance sheet, statement of cash flow, income statement etc., at least not in the prescribed form. So I ended up having to do all these things at the end of the year, or rather when I got close to 6 months after the end of the fiscal year of my company, when it’s time to file the tax return.
I wised up, and got myself an accounting software to keep track of everything, even sales taxes (almost never applies in my business, but still) I have to reimburse to or get a credit for from the government. Now, it’s just a question of being disciplined and of doing it regularly. At least for a while, soon I’ll be able to afford to pay my bro to handle all this for me.