How can someone best prepare for the April 30 tax deadline? What should be on their preparation checklist?
When preparing for tax filing, the key is to be proactive. It is always best to keep track of your tax related documents throughout the year. If you wait to compile all the information, it becomes a bit hectic and can cause delays. Soon enough, it’s Tax Day Eve, and there’s just no way to get your return done on time.
Don’t hesitate to ask your accountant for a checklist of items required to complete your personal taxes. A checklist can serve as a great starting point in gathering the sort of information you need to complete your taxes. It’s also a good idea to contact your investment advisor early to get any required documents, such as RRSP and other investment holding documentation so that you can get started on your taxes in a timely fashion. For instance, if you hold any foreign investments, your tax filing may include a T1135 form. In order to prepare the T1135 form, your tax accountant will require certain details from your investment advisor regarding those foreign investments that can be time-consuming. Don’t wait until the last minute.
What are the biggest mistakes individuals make on their personal taxes?
The mistake I see all the time is people not keeping or maintaining records of their expenses. As a result, they can’t provide complete information to their accountants and lose out on opportunities to take advantage of credits and deductions.
Another mistake I see is people choosing their accountant based solely on their prices. Competency should be the deciding factor when it comes to something as important as your finances and taxes. Incorrect tax filings or inappropriate tax treatments can be costly to the taxpayer. Your accountant should be a true advisor, so I encourage individuals and business owners to seek advice and direction on tax planning as well.
What easily avoidable mistakes do small business owners make?
You’d be surprised, but I’ve dealt with a lot of small business owners who don’t understand the significance of accurate record keeping. Without proper record keeping, business owners can’t foresee cash flow issues or keep an accurate handle on their business’ financial condition. This is a very common problem for start-up companies, which often leads to major cash flow crunches.
Another mistake small business owners make is waiting to contact their accountant or lawyer when a situation arises. They look for help after the damage has already occurred. Remember, medicine always works best when taken on time. The solution is to surround yourself with professionals, including an accountant, financial advisor and lawyer, and plan periodic meetings to discuss your performance and future business plans.
What are a few ways to save a few tax dollars?
Individuals and businesses have different opportunities to save taxes. A few things to discuss with your accountant are:
- Utilizing child care or child fitness expenses.
- Utilizing RRSP limits by increasing contributions (especially if you are in high tax bracket).
- Taking advantage of TFSAs to earn tax-free interest income.
- If you are married or have a common-law partner, allocating or claiming expenses (medical expenses, donations, etc.) based on income level of both taxpayers.
- Salary versus dividend planning for the upcoming years for business owners.
Tell us about your background. When did you join Sloan Partners?
Before joining Sloan Partners in 2014, I worked for a large national firm and a small mid-sized Toronto-based accounting firm, assisting owner-managed and mid-market clients with their business needs. I enjoy cultivating long-term relationships with my clients to offer the best advice possible. My professional experience includes assurance, tax and advisory services for manufacturing and distribution, real estate, construction, transportation and logistics, professionals, and technology clients.
What made you decide to become a CPA?
Growing up and coming out of school, I already knew that I wanted to be a CPA. I was involved in the finance society at my school, and I learned all about the opportunities the profession can offer. I can vividly recall the advice of my career counselor still today. He said, “Nearly every financial circumstance in every business environment can benefit from the services of a CPA. It’s really up to each individual to find a path that suits their own unique goals. Are you tech savvy, curious, detail-oriented? Or, are you cool, calm, and entrepreneurial? Maybe you just like your martini shaken, not stirred. No matter what, there’s a rewarding path for you as a CPA.” I remember thinking at the time that I should certainly be a part of this profession!
What is your favourite thing about your profession?
I enjoy that there is a lot of out-of-the-box thinking and opportunities to add real value to businesses. Our profession is not limited to just numbers; CPAs are multifaceted professionals capable of performing a variety of highly specialized job functions. Whether focused on finance, management, marketing or HR, CPAs are a vital part of any strong business or organization. In all three major areas of the accounting industry (public, private and government), the CPA skill set is valued and respected as the pinnacle of professional achievement. The profession offers job promotion and travel opportunities, as well as opportunities for personal growth.
I hear you’re a cricket fan. Who are you cheering for in the 2015 Cricket World Cup?
I love sports and cricket is one of my favourite sports. Since Canada is not participating in this World Cup, I am cheering for my birth country of Pakistan.
Hammad Sheikh is an Associate Partner at Sloan Partners and a member of the institute of Chartered Professional Accountants and the Texas Board of Public Accountancy. He is very well versed with GAAP, IFRS and Tax concepts. Along with traditional accounting, audit, and tax services, his focus is on providing business advisory services for privately-held companies and their stakeholders.