As someone who owns your own private practice, do you dread tax time?
You don’t need to work in mental health to know how stressful tax time can be for the average Canadian. Even someone who is completely prepared, with itemized lists of expenses and every last receipt filed and organized, can get a little panicky around this time of year.
If you own your own practice, odds are that your tax return is going to be more complicated than most people’s. This puts you in good company with the vast majority of the self-employed and entrepreneurs in this country.
Most new private practitioners start out thinking that doing their taxes will only take a few hours. Then they slowly realize they might be in a little over their heads. There are often more forms than they can count, deductions that they can’t find, and tax credits that seem to vanish when they look away for only a second.
Thankfully, there are a number of ways that you can simplify the entire experience, from organizational methods to simply hiring a professional to handle it.
Keep Organized
Everyone parrots this advice about doing your tax returns: if you keep organized throughout the year, doing your tax returns will be easy. Well, easier said than done! You need the right system in place to facilitate your bookkeeping and year-round accounting.
Many of us start out very organized, but without a user-friendly system in place, we soon lose control of our financial records as the year goes on. By January, most people have a solid mess of receipts and invoices that require hours of sorting before they even start to make sense.
To Print or Not to Print
One of the major advantages of using Owl Practice is that everything is kept organized automatically online. If you need records of any invoices and receipts, they’re right there in your account. There’s no need to print anything because it’s all filed for you digitally. Should you ever need to print an item, in the case of an audit for example, you can see a complete history of all invoices and payments in one place and access whatever files you need. Everything is itemized and documented within the Owl system.
When tax time rolls around, exporting the data that you need couldn’t be easier than with Owl Practice. You can use the Accounting Export feature to download a complete history of all the appointment, invoice, fee, and payment data for your accounting year. In just a few clicks, you can generate a .csv file which you can then send to your accountant or bookkeeper. The data that you send is always free from any personally identifying information so your clients’ privacy is always assured. Similarly, you can access any outstanding balances at the end of the year, or other data that your accountant might be looking for. Read more about Owl’s accounting features:
- Year-end Accounting Tips
- Accounting Details for your Accountant
- Make accounting work for your practice
Just Say No to the Shoebox
One of the great things about Owl Practice is that it helps to reduce paper waste and clutter. However, even if you’re scanning or photographing tax documents, the CRA does require that you keep your originals. Make sure that you hang onto every cheque, invoice, receipt, or anything that has to do with money throughout the year. We aren’t a fan of the shoebox storage method. We believe in minimizing clutter and wasted space. Everything gets mixed up, requiring a huge organizational shuffle before you can even complete the most basic of math. We prefer envelopes or files, but if you’re stubborn about using shoeboxes, at least get 12 of them, one for every month. This will cut your organizational job down significantly.
What Is Your Time Worth?
As someone who cares for the mental health of others, you know how important it is not to overextend yourself. Tax time is a perfect example of how difficult this can be. There are many of us who feel like we have no idea what we’re doing when it comes down to filing our taxes. So why do we have to do them at all? Why not use an accountant?
If your automatic response is “I don’t want to pay for an accountant”, consider this: How many hours will you spend doing your taxes? Even if you ignore the time you have to spend organizing your records, you also need put in hours of researching potential deductions and credits, checking the math, and hoping that you haven’t missed anything. There’s also the potential worry that if you make a mistake and an audit might be on the way. Is it really worth it?
Evaluating Value
As a mental health professional, you already have a very tight schedule. That’s why so many Canadian therapists, psychologists, and social workers choose to use Owl Practice; to spend more time practicing and less time managing. Trying to find the time to do your taxes when you’re already under constant scheduling pressures can be incredibly frustrating. That’s why, when you consider the time/cost analysis, it usually makes more financial sense to use an accountant.
With an accountant, you can be sure that they’ll catch every single deduction and credit that you’re eligible for. You can rest assured a professional accountant is highly unlikely to make a mistake. Simply give them your records, and that’s the end of it.
If you decide to self-file your taxes, it can be well worth it to invest in a reliable and professional tax filing program. Not only will it check your math for you, it can also help to ensure that you aren’t missing any deductions or credits. A good program will save you time, as instead of putting together a massive package to mail off to the CRA, you can simply hit a button and boom, your tax returns will be filed!
The Right Tools Are Always Worth It
Tax return time can be a very stressful period, but it doesn’t have to be. When you use Owl Practice, you’ll be infinitely more organized come tax season, and it will be that much easier to pass along your tax information to a professional. With everything so well organized in the Owl system, it will make the accountant’s job that much easier and more streamlined. You might be able to minimize, or even completely eliminate, the stress of taxes.
As always,
Practice Wisely
