Don’t get slammed by missed deadlines! Find out how to systemize your taxes to complete your Canadian and U.S. returns on-time and avoid expensive fines.
Getting your paperwork in order is one of the most important aspects to optimizing on your returns as a cross-border real estate investor.
If you’re a Canadian buying and selling U.S. real estate, December is the time to get your expenses done.
Top 5 Reasons Every Cross-Border Real Estate Investor Needs To Organize Expenses
Before The Holidays:
1) The holidays are the busiest time of year for everyone.
Don’t shoot yourself in the foot by ignoring that statement. Even if you don’t partake in the frenzy of the holidays, the lineups in shopping malls, the never ending string of holiday and end of year parties, the stress of those around you…
Consider yourself booked.
I usually start getting my paperwork organized in the last week of November just to be prepared.
2) You need U.S. returns back before you can complete your Canadian returns.
The only way to ensure you get your U.S. returns back on-time is to submit your information EARLY, as in first or second week of January preferably.
Why so early? Keep reading.
3) What you think you need to submit is probably wrong.
The average US return for an entity takes 45 days once you provide ALL the information.
If this is your first year of filing you will have many holes you aren’t even aware of in your information. Your accountant will have many questions and need additional information. They cannot complete your return until all information is provided and that is when the clock starts on the 45 days, not on the first day you submit it.
4) The IRS allows extensions for filings, the CRA doesn’t.
You should avoid this option if at all possible.
Once an extension is filed, your US accountant doesn’t have to file your taxes for an additional 3 to 6 months, and is under no obligation to either. This will mean you can’t file in Canada for your personal and/or Corporate until September/ October.. which for those of us owing can equal an uncomfortable penalty in the wallet.
5) Once it’s all written out, you have a better view of your PLAN.
Re-evaluating your goals and your plan can be a daily, weekly and monthly part of the process.
Once all those dollars and cents are on that list you can see what it took to get where you are. That’s when you start to really get into the nitty gritty details to decide what expenses were effective and what expenses you don’t want to repeat next year.
Seeing everything in black and white will help you plan the next 12 months and what you need to do. This way, you know what you want to accomplish next year.