It’s tax day at my house. It’s the day I sit down with a big file of papers and a sharpened pencil, and I jam out my personal income tax.
No, I’m not late. In Canada, most people’s taxes are due April 30th but business owners have until June 15th to file their personal taxes (presumably because there is a bunch of corporate tax files that they are waiting on from earlier in the year). Since I own a couple of businesses, my taxes aren’t technically due until two Mondays from now but I like to have a bit of a buffer zone. Actually, I would have done them earlier this year except I was just waiting on some paperwork from my accountant.
I like doing my own taxes. Yeah, I realize that makes me sound like a finance nerd (that’s the second time this week I’ve described myself that way) but I have my reasons. Actually, I wrote them last year: Here’s why I still do my taxes by hand. However, this year I’m actually filing them online, which is a new thing for me. (That makes me sound like a Luddite but I really do like the pencil-and-eraser method). I’d even do my own business taxes if I didn’t have to have an accountant do them for me.
The reason I do my taxes the old school way — by myself, by hand — is because I want to know exactly what I’m paying. It’s not that I don’t trust my accountant. Rather, I know myself and I know that I wouldn’t care as much about my taxes as when I do them myself. By doing my own taxes, I gain a good idea about my tax rate and about what I need to earn pre-tax and post-tax if I want to hit some of my business’ financial goals in the coming year.
I’m not against tax — I do believe that it’s the price to live in a civilized society — but I believe it is my duty as a taxpayer and a business owner to know what the impact is on my personal and business finances. As my (recently deceased) friend Rodney used to say: People would revolt if they received their gross pay in their pay check and then had to write their tax check to the government themselves.
So here’s what I’m doing this year (and I do something similar every year):
- I start with sorted papers — everything is divided up between my wife and I already — and I do the total income sections for both Janelle and I.
- I take a break. This year, I’m watching The Sopranos (because for some reason I never watched it when it was actually on the air), so I’ll watch an episode.
- I do each of our net income sections.
- I take a break.
- I do our taxable income section.
- I take a break — more Sopranos!
- I do our amount owing or refund. (I don’t mind owing the government a bit of tax money).
- And then I send!
So easy and painless… and maybe even a little fun.
What are you doing today?