Going Paperless

One of the benefits with going paperless, is that it reduces the risk of receipts getting lost, fading, or getting damaged.

Tools such as Hubdoc, Receipt Bank or Expensify act as a digital filing cabinet and can automatically fetch, organize, and store your digital receipts, If you combine those services with Xero or QuickBooks Online, your receipts will be attached to your bank or credit card transactions making your books audit proof.

The only discipline required is remembering to snap a photo every time you make a transaction (or, setting aside a few minutes every week to do this).

An alternate but effective option for many small businesses is to snap a photo of the receipt or scan it onto their computer and then upload directly to cloud storage services, such as Dropbox, or Google Drive. This is good but doesn’t automatically enter receipts into your accounting, nor make them easily searchable.

Regardless of the solution you choose, having all of your financial documents in one place will help you prepare for tax time!

TFSA - Tax Free Savings Account

The Tax-Free Savings Account (TFSA) is a saving/investment account that can hold any combination of eligible investment, such as cash, stocks, bonds, GICs and mutual funds.

Contributions to TFSA are not deductible for income tax purposes; however, amount contributed as well as any income earned in the account (such as interest income and capital gains) is tax-free, even when it is withdrawn.

Administrative or other fees in relation to TFSA and any interest or money borrowed to contribute to a TFSA are not deductible.

RRSP - Registered Retirement Savings Plan

RRSP “registered retirement savings plan” can help you save more for your golden years. You can contribute as much as 18% of your annual income up to a maximum of $26,500 for the 2019 year.

RRSPs have two main advantages:

. The first, is that RRSP are a tax deferral plan, it reduces your taxable income until you withdraw it in. So, if you’re in a high tax bracket, investing an in RRSP could help push you into a lower one.

. The second, is that any money invested in the account can grow tax-free free until it’s withdrawn.

The RRSP has some other uses, too, like the Home Buyers’ Plan, which allows people to remove $35,000 from their account to pay for a first home without having to pay a penalty, as long as the borrowed funds are re-invested within 15 years.