Get Ahead of Remote Tax Preparation: Here’s How!

Now that the entire world is somewhat used to living in quarantine, the new normal has probably set in for you. You’ve fallen into the ebbs and flow of living in your small bubble, wearing your face masks, using hand sanitizer, and meeting your colleagues through Zoom. Just like most pre-pandemic activities (think hanging out with friends), tax preparation still looks the same—just with a twist. Despite all the chaos over the last year, remote tax preparation is still happening. It’s just done remotely or with social distancing measures in place!

Remote tax preparation is easy, so long as you build positive habits for your bookkeeping. The team at TrulySmall™ has got you covered in terms of understanding the big picture—particularly when it comes to invoicing.

This includes:

• What you need to do, and
• The tools you need to successfully tackle remote tax preparation

What you need to do

1. Set up a virtual meeting with your accountant

Meeting your accountant is going to look different this year. Meetings with anyone, both work, and non-work activities, is going to rely on things like Zoom, Slack, Google Hangout, or equivalent. Get your digital signatures ready to sign and date any authorization forms if you’re onboarding and meeting your accountant for the first time. B

ring in questions to ask, and better yet, look into your accounting software to see if there are any tax documents that you can bring in advance of the meeting. If your accounting software allows it, you can also share access with your accountant so that they can review your numbers.

2. Locate your documents

From receipts and invoices to reports, you’ll want to get them prepped for your virtual meeting. If you have been diligently tracking these, as opposed to keeping them in your shoebox or your one too many wallets, then you’re already well ahead in terms of remote tax preparation.

Here’s what you should have on-hand before you meet your accountant remotely:

• Documentation for your business deductions (if you’re claiming self-employment income)
• Any relevant letters or documents
• T-slips for the year
• RRSP receipts for the year
• Charitable donation receipts or total donation amount for the year

Note: 2020 was the year of the pandemic, so there are additional considerations like the new flat rate, home office deductions, and T-slips you need to be aware of. For example, if you received COVID-19 emergency benefits in 2020, you’ll need to fill out a T4A and/or a T4E. T4A is for benefits issued by the CRA, while the T4E is for benefits issued by Service Canada. If you’re unsure, always ask a professional!

The tools you need to do it right

1. Tax filing software

If you plan to file your tax return yourself this year, you’ll need income tax software. TurboTax and SimpleTax offer free tools to enable you to file your self-employed or business tax return. Simply create an account and begin filing your tax return for free. For business tax returns, it’s always a good idea to either file with an accountant or hire an accountant to help answer any questions that you may have.

When filing, don’t forget about certain tax loopholes that you’re entitled to as a truly small business.

2. Invoicing app

Truly small businesses need a simple solution. Taxes are all about having the big picture understanding of your finances—both cash in and cash out. The two together eventually determine how much you’ll pay in taxes. As a truly small business owner, if you’re not already tracking your income and payments, then you’re missing out.

Intuitive invoicing apps like TrulySmall™ Invoices can be a great tool that covers all the basics. Whether that’s creating invoices, saving incomplete invoice drafts, sending invoices to your clients directly from the app, or tracking outstanding invoices, TrulySmall™ includes the “essentials” tool that has everything you would need to tackle remote tax preparation.

The best part? The more you use TrulySmall, the smarter it gets. It’ll even auto-populate client details for you for recurring clients.

Create your first invoice today—it’s free and extremely easy.

3. Accounting software with a full suite of invoicing tools

Though good invoicing habits can set you up for success during tax season, so can the help of accounting software. TrulySmall™ Accounting is another option for remote tax preparation if you’re looking for a more comprehensive set of accounting tools. Accounting software generally offers a lot more bookkeeping tools compared to standalone invoicing apps, but not every small business owner needs every feature, either.

And since, invoicing is more than just a piece of paper with numbers, rates, and descriptions, Kashoo, for example, reflects that too in its core features.

Key benefits of using accounting software for remote tax preparation include:

• Reduce administrative error by allowing software to automate specific tasks like data entry, invoicing, and automatic bank feed syncing and reconciliation. With spreadsheets, you’ll have to input all the data yourself—from creating invoices to managing expenses, receipts, and reconciliation with all your business transactions (income and expenses) to ensure that they’re in alignment.
• Reduce precious time spent on laborious bookkeeping tasks by automating business-critical tasks like sending payment reminders, tracking invoice status, and reconciling transactions with those in your bank feed. With Kashoo, for example, the software tracks it for you, flags late invoice payments, allows you to send a credit card payment along with the email, uses optical character recognition (OCR) to review your invoices for you, and matches those transactions to what’s shown in your bank feed. That’s a lot of wasted time retrieved!

Want to get ahead of remote tax preparation? TrulySmall™ Invoices is available on your mobile devices (iOS and Android) and is web-based if you prefer your laptop. Try it for free to see how easy invoice management can be. Trust us when we say, good invoicing habits and the right tools can go a long way!