More Money Podcast - 044 How to Do Your Taxes like a Pro - Gerry Vittoratos, Tax Specialist at UFile

Episode Date: April 6, 2016

I interview UFile tax specialist Gerry Vittoratos on what tips we should all know so we can do our taxes like a pro and get the biggest tax refund possible. Long episode description: As I mentioned at the beginning of this episode, before I launched this podcast one of the topics I hoped to cover down the road was taxes. You may think that taxes are complicated, intimidating, boring, or maybe you just don’t want to think about them at all. No matter the case, we all have to do our taxes every year, so we might as well educate ourselves so we can get the best possible tax refund. I still remember the first year I did my taxes on my own. I used UFile to file online and I was terrified. I had no idea where to start and thought the process would take me a few weeks. Luckily at 24 my finances were very simple and UFile was very easy to use, so it ended up only taking me a few hours. Since then, I’ve gotten married and my finances have definitely become a lot more complicated. The one big thing that has changed is I’m no longer terrified of doing my taxes. Every year I continue to learn how to optimize filing my taxes, and in this episode UFile tax specialist Gerry Vittoratos really breaks down the secrets to being a pro tax filer. Tips on How to Be a Pro Tax Filer Gerry shares a wealth of knowledge in this episode, so here is a simple list of some of his top tips on how to be a pro filer. Get organized: Gerry mentions this tip throughout the episode because it can effect your experience and your refund big time. I mention my method of using two boxes to hold receipts and documents for my husband and I, and I highly recommend you implement a similar practice too. Scan your documents: Besides having all of your paper documents and receipts in one place, scan them too! Not only is it a great way to digitally archive anything, this makes it way easier to search things too. Take advantage of medical tax credits: There are a ton of tax credits you can take advance of, but some credits that Gerry mentions most people don’t even think about are medical tax credits. Check out the CRA’s website all about what you can claim and how to do it. Read your tax software guide: If you plan on using a tax software like UFile, make sure to read the guide so you can get the most out of it. It sounds so simple, and that’s because it is. So do it! Don’t do something stupid with your refund: Getting a big tax refund is only awesome if you don’t blow it on something you’ll regret later on. Don’t be like so many others and waste your tax refund on a vacation. Make the smarter choice and use it to pay down your debt or invest it. Blog Posts by Gerry Vittoratos Your most important tax document Tax Awareness Super Useful Tax Resources 5 Surprising Ways You Could Save on Your Taxes this Year Tax Preparation Checklist UFile Gets a Major Facelift & I’m Giving Away Prizes to Celebrate! Top 10 Things You Need to Do Before Filing Your Taxes Shownotes: jessicamoorhouse.com/44 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Mo Money Podcast with your host, Jessica Morehouse. Hello and welcome to episode 44 of the Mo Money Podcast. I am your host, Jessica Morehouse. Thanks so much for joining me. Today is a very special day because I'm talking about a topic that I've actually wanted to talk about even before I started this podcast back in June of 2015. Taxes. Taxes. I know most of you may not be as excited about taxes as I am, but I actually really find the world of taxes pretty interesting just because it's all about playing the game. If you play the game right, you get a bigger tax return back. That means more money in your pocket. So why wouldn't you want to know how to do your taxes the best way possible? So that's why I'm super excited to be interviewing my next guest

today, Jerry Viterato. He's a tax specialist with YouFile, which is a taxpayer software program. Actually, the first tax software program I used when I did my taxes for the very first time back in 2009, 2010, when I had no clue what I was doing. But luckily, I used U-File and it made the whole process so much easier. And just because I've mentioned U-File a couple times, in case you are looking for a tax offer program to use to file your taxes this year, make sure to check out the show notes, jessicamorehouse.com slash 44. And I've got a special promo code you can use so you can save 15% off of purchasing the program. So check it out.

I also did a blog post a few weeks or months ago all about things that you need to know before filing your taxes. Highly recommend you check out that post. You can check it out at jessicamorehouse.com slash tax tips. months ago, all about things that you need to know before filing your taxes. I highly recommend you check out that post. You can check it out at jessicamorehouse.com slash tax tips. And I give you the top 10 things you need to do before filing your taxes. The promo code is also in there and a freebie. I even, you know, spent some time on making a very special tax preparation checklist. So if you don't know where to start or what to do, what documents you need to file your taxes, don't worry, got you covered, made

it all in this fancy schmancy checklist. So make sure to check out that. I'll also put them in the show notes. But you know, just saying, I've got you covered. Tax season is 2016. It's going to be the best tax season of your life. And on that note, let's talk to Jerry about taxes. Thanks, Jerry, for joining me on the show today. Thank you very much, Jessica, for inviting me. You're welcome. I don't know if you know this, and this sounds really nerdy, but when I had my initial plans for launching a personal finance podcast back in, oh, maybe it was March or April of last year, which it was tax season. I actually am like, you know what? If I have a podcast, if I actually do launch one, I want to interview someone who knows everything about tax.

Because lots of people think it's either complicated or boring, but it actually is something that really fascinates me. Because the more you know, the more you can kind of get out of it. And I always kind of think of tax season and just doing your taxes as kind of a game. Like if you know how to play the game, you can get more money back basically. So I'm pretty excited to have you on the show. Well, thank you. I'm really excited to be here actually to teach you the wonderful world of taxes. Yes.

I love it. All right. So let's jump in. My first question for you is, as a tax specialist, you've been in the industry for quite a while, for several years, right? Yes. I've been now for 10 years as a preparer and as a trainer as well. So it's been over 10 years, actually. I celebrated my 10th year. So you've probably seen a lot of different cases and everything like that. Yes, absolutely. I mean, you'll see all sorts of cases with taxes. It's just a variety of things that you could see because, of course, it affects people in such a profound way. Taxes affect all of us. So, of course, people take it to heart. So that's why you see all sorts of cases, which are very, very interesting.

Yeah. That's kind of the interesting thing about taxes. It's like, you know, affects everybody because everyone has to do their taxes. Exactly. And you know, because people feel it's intimidating, they don't dive into it. They don't learn as much as they can. And it's such a huge component of personal finance. It's absolutely and I don't think it's talked about as much as it should be for sure. Absolutely. Absolutely. So that being said, what are some of the kind of common or most popular questions that you have seen from people that you've helped out? Usually it's always related to getting more money. That's it.

Yeah, fair enough. That's usually, you know, or where's my money when you're a tax preparer, you know, and they haven't got funds yet. I mean, that's one. But I would say for the most part, it's usually credits. I would say people are very interested with credits and what can they claim on their return to try to get the best refund possible. You know, for example, you know, can they claim their transit passes? Can they claim their glasses, you know, on their return, for example? What kind of fees can

I claim for my children? Oh, that's interesting. Eyeglasses? Yes. I actually had to get some eyeglasses and I do use them for work. Would that be eligible? Well, it's eligible as a medical expense, not necessarily because you're using them for work. It's just purely eligible as a medical expense, the frames and the appointment as well. So, you know, you'd be amazed what is eligible as a medical expense. Wow, that's really interesting. People don't dive into it. And there's a lot of things that are eligible as a medical expense. So, I mean, that's one side of it, essentially, is, you know, where are my credits? What are some of the credits I can claim? And, of course, you know, whenever the government announces changes to the return, it usually relates to tax credits because, of course, they're trying to get votes, right?

I mean, that's the major thing. And the way to get votes is by announcing, making huge proclamations of, hey, look at this new tax credit, new shiny tax credit that we got for you, you know? So, of course, we get a lot of questions on that. And then what we get as well on more of the high end is a bit more of high end questions, especially, for example, when it comes to properties. Let's say, for example, I've got a summer house somewhere and I'm selling it. What are the tax consequences of that? So these are the kind of questions that I see very

often from a lot of tax filers out there. Interesting. Yeah, I bet you see quite a few things. Kind of going off of that, what, and this is probably a question that you get a lot, what are some of the important steps that one important steps that, you know, one should take to get ready for tax season? I think a lot of people get overwhelmed or terrified. They're like, oh crap, it's April and I haven't done anything. What are some steps that people can take, you know, well in advance so they don't feel crazy overwhelmed come tax season? Well, very, very simply it's to get organized. That's really the big motto I could say to everyone right now is get organized with your documents in general. Create some folder or

a pile or something where you could stick all these documents in. And not just your tax slips or your tax documents. Some of your bills can also affect how your return goes, especially if you're self-employed, for example. Yes, that's really, yeah. I have firsthand experience because my husband is self-employed and has been for years and tax season for him is a whole different story, because I just get a paycheck and it's a little bit more simple. But for him, oh man, he has to save every single receipt just in case. Exactly. And that's the best bet. And I wrote this in one of the blog entries that we have on our website. When in doubt, if you have a gut feeling that this affects your return, put it in the pile.

Just put it there. Start that pile or start that folder and just put the documents in. So that's what I would say is the main thing is to get ready for your tax season. Is essentially to get organized to get at your documents. And one really good way of getting organized is to actually scan your documents, you know, I say that to my wife all the time. I'm like, you know, she thinks I'm, you know, I'm completely messy. And I'm like, but you know what? It's in my pile. And I will find it in my pile, you know?

And then, of course, I'm hunting over and, you know, she's laughing at that while I'm, you know, while I'm miserably going through my documents. And but in the end, you know, if you scan these documents, put them in an electronic format, now you could start searching them. Now you could actually see, oh, wait, that's my medical slip. Oh, wait, that's my donation slip. And now you can start finding them. So that's what I would recommend is that the moment you think it's a tax document, first of all, put it in a pile and then start scanning them electronically and store them electronically.

That would be the biggest tip I could give to all your listeners. That's a great idea. Like I have definitely done the pile kind of thing. Like I bought like these two just cheap boxes from Ikea. One's for me, one's for my husband. I told him, whenever you think you need a receipt or whatever for tax season, put it in the box. And same for me.

Every month I get a new transit pass, I put it in the box. And then we go over the boxes and all of our documents. But scanning things is actually really smart, especially for archiving things throughout the years. It's a kind of an easy way to see what you've done in the past. Yeah, exactly. And like I said, it means that the main reason is simply you could search them, you know, each each document now has a name. And you're not just looking through it and reading it. It's got a name. And now you could go to it straight away, right away.

You have it right there in front of you. Yeah, that's definitely something I'm going to do this year. Great. That's awesome. Another thing, because you mentioned it earlier, people ask you about tax credits. And it's true. I'm always kind of wondering, oh, are there new tax credits this year? Or what are the things that I can use this year that I wasn't able to in the

past? What are some tax credits that people should really kind of focus on this year? Or maybe they may overlook, but they should really get on it. I would say the main tax credits, I mean, I can't say there's specific tax credits per se. I mean, there's a lot of tax credits on the tax return. But I would say start looking more into the tax credits that can be what the government calls carried forward. And essentially, these are credits that you don't need right away that you bank, and then you can use them in future years. Do you have an example? I'm just thinking, I didn't know you could bank any tax credits. you can actually so i'll give you an example is uh one of them is donations okay so donations oh yeah whatever you give as far as donations during the year you if you don't

need it right away you could actually bank it for five years so that's one example tuition is another one tuition is a big one you know especially i. We know that tuition fees are just going up to the stratosphere right now in Canada. And tuition is also another credit that you can bank. And a lot of people don't realize that they have these tuition credits banked with the CRA. And another one, and right now I think it's really apropos with what's going on with the market right now, is capital losses. And that's more of a deduction. That's not actually a credit per se. That's more you're reducing your taxable income, what you get taxed on. But these are also banked. So if you can't use them or you don't want to use them, you could bank them for future years. And a lot of people don't realize that they have these amounts

banked right now. They have it currently. And the way you could get access to them is really two ways. One is to look at your notice of assessment, which I, you know, I jokingly say to people is the most ignored document probably in the world in Canada right now. Unfortunately, people, you know, they just rip off the check, throw it out and say, all right, another year done, you know, I don't have to worry about it. And another way is actually a great service that the CRA offers, which is the My Account Portal. Yes, which I have used quite a bit actually over the past couple of years. It's great. Yeah. I mean, it's got everything you need to know about your tax situation. And the nice

part is that the CRA has made it easy for you to log in by using your bank credentials. So it's really... And I find that when I was a taxpayer, I remember those were the credits most overlooked by people that didn't realize that they had them. And now they can actually start using them and actually start getting a lot of money back. Another one, which I mentioned before is medical expenses. And I repeat that in a lot of interviews that I do, you know, all across Canada is that you'd be amazed what the CRA allows as a medical expense. You'd be amazed. And there's a lot of them out there.

I mean, there's a full webpage right now that you could go to on the CRA. If you go to the CRA website, type in eligible medical expenses, and you get a whole list in alphabetical order of what is eligible. That's awesome. And I find a lot of people really miss out on those medical expenses that they are eligible for. Wow. Yeah, that's awesome. Actually, I'm going to check that out because I do remember – I feel like, yeah, that's definitely something that I don't take advantage of and I really should.

But yeah, I remember several years ago I was going out of the country to – oh, where was it? Maybe Thailand or Africa. I can't remember. But I had to get a bunch of shots. And I'm like, huh, I wonder if these are eligible for a tax credit. And they were. And I'm like, huh, who knew? Good.

Good to know. Exactly. And a lot of people overlook them because, again, they think it's just the big procedures that are eligible. But it's wrong. There's a lot of things that are eligible as a medical expense. Exactly. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express.

Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Switching gears a little bit, this is something that i kind of wanted answered when after i got married because i i had no idea i always just filed myself yeah but maybe it was just from like watching a lot of tv or or whatever but i was under the impression then what when you got married you were allowed to file jointly is that just a thing in the united states or in canada like maybe i'm still a bit confused, but when you get married, do you still have to file separately or can you do it as a couple? On a technical level, what you actually submit to the CRA are single files. You're not filing

you and your spouse at the same time. So when you're using a tax offer, for example, essentially you're filing yourself and then you're filing your spouse. That same time. So when you're using a tax software, for example, essentially you're filing yourself and then you're filing your spouse. That's how it works. Now, it doesn't mean though that you should not be producing both returns at the same time. And the reason why I mentioned that is that most tax software, including ours, essentially optimizes the claims that could be done between you. So there's a lot of credits and a lot the claims that could be done between you. So there's a lot of credits and a lot of amounts that can be transferred between you and your spouse. And the only way that a program like YouFile, for example, can do that and can do it

for you is by essentially producing the returns together in the tax software. Okay. And there's an easy way to do this with YouFile? That's actually really handy. Absolutely. It's just a click to create your spouse's file. I mean, it's literally just one click on a tab. I mean, it's really, it's very, very quick. And the nice part about it is that it handles all of it for you. So for example, let's take donations, for example, that I used before. Donations can be transferred between you and your spouse, regardless of who made the donation. So the program will say, you know, Ufile will simply look at the two files and say, oh, you know what, Jessica, you needed more.

So I'll just give it to you. And these are the kind of optimizations that the program can do on its own. But of course, it can't do it unless you're producing both returns together at the same time. Okay, that's good to know. That's something that, yeah, I just could not wrap my head around for some reason. So thank you for clarifying that. tell that to clients whenever they contact us, well, I don't want to, you know, what my spouse does is what he does. And what I do is what I do. But in the end, they're penalizing themselves, you know, and of course, the CRA wants that information on your return as well. Absolutely. One kind of fun question in my mind, and I don't know, again, if you'd be able to answer this, but, you know, from dealing with so many people over the years, what does it seem like when people get their returns, what are kind of the most popular things that they plan on doing

with them? Like for me, I'm boring and I usually just put it in the bank or put it in my investments or whatever. And what do you suggest in your professional opinion that people should do with their tax returns if they get any? I would say invest it would be one of the best ways, just like what you do, Jessica. I mean, that's why you are the guru. It's boring, but it's a smart move. Exactly. Exactly. And it's good advice you're giving everyone. That would be the best option is to basically invest it because this is money that the government took from you during the year. And what people mistake is that, oh, refund is great news. But actually what it is, is that you've overpaid the government for the year, for the year, right? So, you know, might as well take that money and start using

it to pay off some of your debts as well. I mean, some people, you know, let's not, we see the numbers right now. The credit card debts are huge. You know, personal debts are huge right now in Canada. Why not grab that refund, which is practically a bonus you're getting at that point and just, you know, start really paying down some of your debts and then investing the difference as well. Absolutely. Yeah. I mean, that's what I would recommend. That would be my, that would be the, now, of course, what I see in actuality is a whole other story. They go vacationing. That's usually the most common one. Oh, that just drives me crazy. I know. And it's May, right? So, I mean, they get their funds around May, right? So, I mean,

spring is in the air. They want to go out. They want to explore. Everyone wants, right? So, I mean, they get their funds around May, right? So, I mean, you know, spring is in the air. They want to go out. You know, they want to explore. Everyone wants to explore. So they grab that money. It's a huge check they get right away. And they just want to go out there and spend it on a vacation. But, you know, it's really money not well spent, unfortunately.

No, I think you said it well where people don't realize that your return isn't free money. It's you getting your money back from the government because they took it. You overpaid throughout the year. So have that in mind when you get your return. Exactly. Exactly. They're just paying you back, and you've just given them an interest-free loan for the last year. Exactly.

You could have been making interest yourself if you hadn't overpaid. Exactly. So something to keep in mind. Now kind of talking more specifically about YouFile, the program, which is actually, you know, it was the first tax software program that I used to do my taxes for the first time ever as an adult. So that's why I'm excited to be working with you guys. But what is, how does it differentiate from other tax software out there?

What would you say kind of the biggest features on it are? I would say our interview system. Essentially, we have an interface that we call the interview screen, but our interview process essentially where the program is asking you very relevant questions on your return and essentially guiding you through your return. I call it figuratively holding you by the hand. That's what I call it. And it figuratively holding you by the hand. That's what I call it.

And the program basically grabs you by the hand and takes you step by step by asking you all the relevant questions that could pertain to your return. I think our interview system is really top-notch. I find we're very easy to use on that end because it's less intimidating when the program is engaging you

than you trying to when the program is engaging you than you trying to engage the program. That's our belief as well. The other advantage is the fact that we don't sell what I would call a tiered product. So unlike some other competition that's out there, any version of Ufile that you buy, you're just buying extra returns Each one can produce the same types of returns And you are getting essentially software that can produce all sorts of returns I mean, you could do businesses, you could do rentals You can do employment expenses

You could do farms with the software It's really quite top-notch So whether you're buying the cheapest version Which is what we call a Ufile 4 product, or whether you're buying a Ufile 12 product, you could produce the same types of returns and very complex returns of that. So I think those are two reasons that make us really unique and distinct in the marketplace. Absolutely.

And I heard that Ufile went through a bit of an update recently. Do you want to talk about how it's changed? Yes. One of them is that intuitive interview system I was telling you about. Essentially, the interface is much nicer. It's more pleasing to the eye, essentially, and it's easier to navigate through the program now. Not that it was hard, and the approach is pretty much the same, but it's a lot softer on the eyes. The other thing that's nice about the improvements is our real-time diagnostics.

So while you are in the interview, what the program will do is that it'll simply give you some tidbits and some information about things that are missing while you're entering your information. And this is all in real time. So you see it's at the bottom of your screen and as you're typing away, if you make a mistake right away, Ufile is going to flag it.

And it's going to tell you, hold on, you've missed this part. You should complete it and explain why. And the other improvement that we've made is essentially the tax advice tab or the tax advice section of the software. So what happens when you click on that area is that we give you some additional tidbits on things that you might be eligible for. So we're giving you even extra advice. We're giving you actually,

that's why we call it the tax advice section. And we give you extra advice on how to get the most out of your return. So these are the improvements that we made. We're very proud of it. And it's, you know, and you'll see as you start using it, it's very, very aesthetically, I find it's very

pleasing to the eye. And these features are really, really handy to complete your tax return. Absolutely. Great. All right. I've got two more questions for you. Okay. The first one is, what are the deadlines for your return?

Because there's two, right? Well, it depends. That's the answer, really. With the government, and when it comes. That's the answer, really. With the government, and when it comes to taxation, the answer, anytime you ask a tax practitioner, is this true or not,

the answer is always, it depends. Because there's always all these factors that the government throws in. Now, April 30th is the deadline to basically pay your amount owing and to file your return as long as you are not self-employed. So essentially, that's the cutoff date. The moment you've got an amount owing as of April 30th and

you haven't paid it, you start now paying interest. If you haven't filed your return by April 30th and you go over that April 30th date, then you're also charged a penalty and the penalties are stiff. You're talking about a 5% off the bat and then, and then another percentage as you go along, you know, for every month that you're delaying. Okay. Now, if you're self-employed and we're talking about a corporations, we're talking about now, you know, somebody who was just for yourself, freelancer. Exactly. You know, somebody who was a freelancer, then their deadline to file is June 15th. And the deadlines for their spouses are June 15th as well. So they're both the same. However, and again, it depends, right?

That's always going to be my answer. It depends. The issue now comes in that you still have to pay your amount owing by April 30th if you don't want to pay interest. So even though you've got till June 15th to file your return, you still owe them the money on April 30th. Okay. So it's a little bit tricky there, you know? So, so, you know, my advice essentially for anybody, even for those who are self-employed is do it by April 30th. That's, that's always your best bet, you know? All right. And my second question is, what are some of your kind of top tips for people that, you know, are kind of late to the game? They only have maybe a couple weeks till the deadline. What are some kind of some of your top tips for kind of last minute filers? OK, so for last minute filers, I would say, again, you know, it goes back to the answers that I gave before.

You know, get organized. OK, get your documents in one pile as quickly as possible. And then what I would say is go to the government website and see what are some of the tidbits they're telling you. So there's really great resources on the government website that tell you essentially what's going on. And more importantly, and this is the most important document, I would say, for anybody who's filing the return, even if they're using tax software, read the guide. Read the general guide. It is absolutely huge. For one, the guide is a line by line, which explains to you essentially what to put on there, whether they're entitled to certain credits or deductions or whatever it is. So read the guide as carefully as you can. And then from there, again, get organized. That's essentially what it is.

I can't stress that enough. As a preparer, it frustrates me to no end when I see people who don't have their documents ready, who don't have anything ready. That's what makes the crunch time the crunch time because they just don't have their documents handy at that moment in time. Yeah, absolutely. I completely agree. Well, thank you so much for joining me. don't have their documents handy at that point at that moment in time yeah absolutely i completely agree well thank you so much for joining me and and i feel way more informed about uh doing my taxes almost a little excited to start getting ready wow okay i know i know what happened over the you know what i mean it's taxes jessica you know. I know. Let's not get crazy. I'm not excited, but I'm looking forward to getting them over with.

Well, thank you again for joining me on the show. It was a pleasure having you. Thank you, Jessica, for inviting me again. Thank you very much. Wasn't Jerry a delight? Who knew taxes could be so interesting, right? Am I right? Do you love him now?

Right? No? Okay. In any case, make sure to check out the show notes, jessicamorehouse.com slash 44. I'll include that freebie tax preparation checklist in there, the promo code so you can save 15% off you file. And I'm going to kind of sum up lots of the things that me and Jerry talked on the show today that I think you'll find valuable. So your taxes will not take you that long. You'll get them done in a cinch and then you'll get your tax return back that you can hopefully use not on a vacation to

Mexico, but to invest or pay down your debt. Super fun, right? Awesome. Well, thanks again for listening and I will see you back here next Wednesday. this podcast is distributed by the women in media podcast network