Here’s why I still do my own taxes by hand

It’s tax day today at my house.

Most Canadian personal income tax forms are due on or before April 30th, but the exception to that rule is if you own a business in Canada. Then your personal income tax forms are due June 15th. So I’m completing my taxes today and sending them in. (I didn’t mean to leave it until the last minute but some of the numbers for these forms are derived from my corporate income tax, which I just received back from my accountant on Tuesday afternoon).

It surprises people when they hear that I still do my taxes by hand — I write them out on the forms in pencil for the rough copy and in pen for the good copy. Very old school!

There’s a very simple reason for it:

When I used to be an employee (years ago), I would get my paycheck, look at the after-tax (take-home pay) number and be happy with that. I completely ignored the pre-tax amount and the enormous amount of taxes I was paying. And, like most people, I got excited when I received my tax refund… as if I had just won the lottery. But tax refund money is MY money and I had inadvertently loaned to the government as an interest-free loan. That’s why I think it’s a good idea to owe the government money on your income taxes.

After I started my business, I quickly became aware of the inordinate amount of taxes that one has to pay; I became increasingly aware of the disparity between my pre-tax income and my post-tax income. And, I started to learn about all the ways that businesses can legally reduce their tax exposure (i.e. with deductions for business expenses).

That knowledge (of my pre-tax and post-tax income, as well as opportunities to legally reduce the tax I pay) is worth thousands of dollars to me every single year. That knowledge is something I don’t want to lose. I want to be regularly reminded about the impact that every incoming and outgoing dollar has on my income tax. I want to be reminded that a big chunk of every dollar I earn is going to other things. I want to understand the influence that tax has on my business. It’s similar to why I mostly remodel my own home. The knowledge is very useful to have.

I could have my personal income taxes done by an accountant. Or I could do my taxes on software. But I know my myself well enough to know that as soon as I remove myself from sweating through those numbers with pen and paper in hand, that’s the moment I stop paying attention to taxes in my business. And before long, I’ll join the many people who mistakenly look forward to tax refunds and miss out on additional legal tax-reduction strategies.

So today, I’m sweating through some numbers and I’m probably in a bad mood (because I generally think I’m over-taxed and today of all days I definitely think that!). But it’s a good practice that I intend to maintain for as long as Canada Revenue Agency accepts paper forms.

Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and he's a real estate investor and a copywriter for real estate investors.

3 thoughts on “Here’s why I still do my own taxes by hand

  1. Hey buddy, don’t let it get you down. Focus on the money you’re saving yourself! :)

    The business tax savings tips and knowledge you’ve picked up would make a great post. (I’d read it!) :)

    If it doesn’t fit with your audience you can always use it as a guest post on my site if you like. That is one thing I haven’t seen over done yet and in fact haven’t come across it yet.

Leave a Reply