In Ask Sherry, Money, Taxes

Ask Sherry: Where did I learn how to do my individual and corporate taxes?

You asked, and I am answering every Friday once I have enough questions!

https://docs.google.com/forms/d/1DKFg6SD0Kmb_0U5yb4OTNfkvfmsf5dWxJJbZTzUtH7M/edit

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Does your tax knowledge comes from your University degree or have you actually learned it all by yourself?

I did not learn about taxes whatsoever in university except for a short class on accounting with debits and credits. That, actually, was very helpful in teaching me how to keep my books for my corporation.

If you did learn it by yourself, would mind giving me some hints on how to start understanding it all a little bit better (I’m Canadian and from the province of Quebec), like where to look for reliable information besides the CRA or Revenue Quebec, sometimes I find the language used at those sites a little bit to technical for me.

Me too! I am also in Quebec, and I find in general, their sites and language confusing.

The background of how I learned is I have always done my taxes since I started working at 16. I did it all by hand, paper, pen, reading the guide line by line, and filling it all in.

Once tax software was created, I was so happy to be able to just enter some income and let it go, but I was also happy I learned how to do it by hand because there is something in doing it by paper and pencil and filling in all the forms, that really teaches you how it all fits together.

For personal taxes, I use tax software. If I have any questions on anything the software calculates, the short answer is I first google it on the CRA, then RQC website, and then I read accountant blogs to see if I can gather more info.

I also find the paper guide published by the government to be pretty informative. I sometimes refer to it when I am doing my personal taxes to understand why the software is doing something I am not expecting.


For corporate taxes, I also use software for bookkeeping, but since I had an accounting course in university, I understand how to do general journal entries, etc.

For how to set it up, I initially paid an accountant to walk me through categories for my business, what I could and couldn’t claim, and other such rules. After I did a first year with him, I took over and made detailed notes on doing my taxes from then on.

The hands down, best internet resource when CRA and RQC are being vague, is Taxtips.ca. I have spent hours reading their documentation on rates, and they DO update it every time something changes, it is an excellent resource. They even have calculators.

Every year before tax season, I head to their site and I read the updates in taxes for the year.

The rest of the learning has been trial and error. I have opened, closed and run 3 corporations by now, and I have made plenty of mistakes, which then result in fines or late fees, to which I then picked up the phone, called CRA or RQC and asked them to explain to me where I went wrong in my calculations and why. Then I take detailed notes, and never do the mistake again.

Sometimes, in the re-assessments, they explain why they changed something or if a new rule applies, if I don’t understand it, I google it, read about it, and try to understand why I did or did not qualify, and then change my procedures going forward.

Failing that, I have an accountant on retainer, whom I call, and he charges me for the advice given at an hourly rate. This is always the best way to go if it doesn’t seem like it makes sense to you, but I have only used him for corporate things.

Thanks a lot, love your blog!

Thank you! You are too kind.

Still have a burning question?

You can ask any question using the form here and all of my previous Ask Sherry posts are here.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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