March 31st, 2015

The Late-Onset Adult: Tax Tips

I think late-onset adulthood is fairly common in our society now–even the phrase “live at home” has developed a meaning specific to recent times (surely we all, in fact, live at home). And frankly, at 36, I’m rather proud of all the grownup things I do–I support myself financially, I shop for and prepare healthy meals, pay bills, care for cats and occasionally other people’s children, take myself to the doctor when I’m sick, travel, even drive a car if I absolutely have to. I’ve booked hotels, helped friends in trouble, run meetings, navigated strange cities, gone to parties alone, hell, I even got married. Sometimes I add it all up (usually when I’m on the subway for some reason) I’m genuinely shocked that I’m so…functional.

But I don’t do my own taxes. I’ve always found this rather embarrassing, but every year I still bundled up the papers and trucked them off to my mom. She does the whole family, and is very very good at it. She used to be part of a volunteer squad who would go to nursing homes and community centres in low-income areas and do tax returns for whomever asked. When she wasn’t able to volunteer any more (logistical reasons), she still had us to keep her busy.

But really, taxes are stressful and I’ve been feeling guilty about putting the burden on her. Also, a bit embarrassed at not really understanding my own financial matters. So I’m on a slow, easy path to tax maturity–this is year three, and I figure there’s probably about three more in the process. I thought I’d share how I’m doing this, in case you’d also like to try for tax maturity. A few caveats…

* this process probably won’t work unless the person who is doing your taxes is doing it out of love–a parent, sibling, partner, or close friend–someone who is willing to help you however you want to be helped, and spend a lot of time with you to do it. This will probably not work with, say, a professional tax preparer.

* my taxes are semi-complex due to the fact that I have both a day-job and a small business as a writer and editor. I don’t earn all that much from my biz, but it’s all in little scraps and so are the deductions I have to take against the earnings (true fact: I got a T4A for $25 this year). Plus I’m dealing with lots of little, disorganized publications and groups, so they don’t always issue their paperwork properly–or at all–so I have to keep detailed records of what actually happened to present to the CRA. This makes my taxes more confusing, and much bulkier, than those of someone who just has a job with a single T4 and then some deductions and that’s it. So that sort of person could likely zip through the process a lot faster than me.

* I do my taxes by hand, because that’s how my mom does them. Apparently there’s all kinds of software that makes things easier, but if I used them then my mom couldn’t help me and I am only halfway through the process so I still REALLY need her help. I figure in a few years, when I’ve really got things sorted, I will try to learn the software–for now, my forms come from the post office and I mail them in a manila envelope. No online tax tips here.

Ok, here we go…

Year 0 (as many year 0s as you need): Sort through your receipts and slips and give the person doing your taxes an orderly set of papers. Sift out all the unnecessary stuff. If you’re me, you keep any vaguely important paper in a box all year–receipts for things you might want to return, vet bills, notices from your landlord–and only at tax time do you sort through and shred the stuff you didn’t wind up needing. At least, I do that now–I’m ashamed to admit there was a time when I just gave the box to my mother and let her decide to do with that fully-paid dentist bill.

In addition to simply removing the useless stuff, try asking the person helping you what categories the papers should be sorted into and then do that (the first year I also organized within categories by date, but I found out that’s pointless). This allows you to not only take some of the stress off your helping person, but also start to form a basic sense of how taxes work. I actually wrote a decent story set in a tax preparation class way back in 2007 based only on this sort of info. You can learn a lot just by making neat little piles of papers.

Year 1: Show up with your papers for your mom or other helpful soul to do your taxes, but then–this is big–stay. Don’t run away and let the tax preparation process remain mysterious–stay and watch, and hopefully your person will narrate what’s going on. I’m lucky (very lucky!) in that both my folks are born teachers and my mom is at ease not only working on the taxes but explaining what she’s doing. I wish you similar luck, but you may have to ask more questions if you’re not able to follow. Don’t be too intrusive, bring tea, offer shoulder rubs, and try not to let your mind wander. This is the last low-stress year, since you’re just absorbing the process and no one is asking any hard questions of you. But again, you should still be learning.

Year 2: Ok, this is the first scary year–show up with your papers, bring your person a cup of tea and now YOU do the taxes, with your helpful person watching. This can end up a lot like year 1, in that if you stare blankly at a piece of paper long enough the person who knows what she’s doing will probably just tell you what to do next, and if you do that enough times you’ll eventually be done the whole tax return. Try to make some stabs at finding your own next move, and trust your person to tell if you’re screwing up. Keep a copy of the Year 1 tax return handy, too, so you can imitate what worked last time around when the much smarter person was doing the return.

Year 3: Do your taxes by yourself based on what you’ve learned so far, the guidance of reviewing last year’s return, and the occasional phone call (I may or may not have called my mother 6 times in March specifically about taxes) or email. At the end of this process, give the completed return (good copy, but be prepared to make an even better copy) to your person to make sure you didn’t go off the rails anywhere. This is the year I’m just completing–I handed over my forms on Sunday at brunch, and I’m feeling pretty darn proud. I guess I should wait until I get the feedback before counting any grown-up gold stars, though…

Year 4: This is a projected year, but I anticipate it’ll be similar to Year 3 except with fewer phone calls.

Year 5: I think I’ll try to learn the software this year, which means I can call for advice during the process but I can’t  show my mom the final product (because it’ll live in the internet somehow? do I have this right?) I really should be ok with that at this point, I think–especially with the in-process phone calls.

Year 6: I’m not sure this is really as close as three years out, but eventually I want to be the sort of person my mom is, tax-wise and generous with said wisdom. My aim is to take over my husband’s taxes and save him the money he’s currently spending on H&R Block, but I’d only do that if we were really feeling confident, because I find another person’s documents trickier to understand than my own. And then perhaps I’ll go further afield, wandering the streets and helping others with taxery. I shall be beneficent and carry a flaming calculator…

Well, you get the idea! Did you come to any useful life skills at a later age? How did you do it?