WATCH ABOVE: Filing your taxes – accountant vs DIY
It’s that time of year when Canadians start gathering their receipts and slips in order to file their 2014 tax returns. But should you file your taxes on your own, or go to a professional?
We asked financial experts when they think you should DIY and when to seek professional help. Everyone is different and there is no universal answer, but to get an idea of what path you should take, start by asking yourself these questions.
How complicated is your financial situation?
“You can do it yourself, but I think it depends on your personal situation and also making sure that you take advantage of every single deduction that you can,” said Laurie Campbell, CEO of Credit Canada Debt Solutions.
Taking advantage of every deduction requires that you’re well-informed of the Canadian tax system, as changes to the system happen all the time.
“The tax system is so incredibly complex that it overwhelms people,” said Preet Banerjee, personal finance expert.
If you have a complex financial situation — own your own business, hold numerous investments, are divorced and paying alimony, working freelance, for example — you may want to use a professional. However, if you earn a regular salary at one full-time job, you’re single, renting, and so on, it may make sense for you to file your own taxes using tax software.
If you think you are fairly uncomplicated, but want to be sure you’re getting the most back on your tax return as possible, one suggestion is to try both.
“For someone who is salaried and doesn’t have a lot of tax complications, do both for a year or two and see how well you do with the tax software,” suggests Banerjee.
“You don’t have to file it through the online software, you can compare it to what someone in person might say,” he said. “If you find that you’ve got a handle on it, then maybe you want to do it yourself with the software, and if not then maybe you want to use a professional.”
Has your financial situation changed in the past year?
Did you recently get married, have a child or buy a house? “The main thing…is to make sure that you know all the parameters around those situations and be able to know the deductions and credits that might go with them,” said Caroline Battista, senior tax analyst at H&R Block Canada.
The key, Battista said, is to be informed — “do your research.”
If you haven’t researched the ins and outs of your tax situation given the recent changes in your life, a tax professional may be more likely to catch things otherwise missed. Battista said that sitting down for an interview with a tax expert could spark ideas on things that have changed during the year.
One area that often gets overlooked involves tax credits and deductions for seniors.
“We talk about the Guaranteed Income Supplement as one of those income-based advantages that seniors can take – if they’re doing their taxes themselves, chances are they’re not going to catch it and the government’s not going to tell you about it, but a professional might,” said Campbell.
“There’s something like a billion dollars of income benefits for seniors that go unclaimed every year – a billion dollars,” said Banerjee.
How much can you afford?
There’s no question that doing your taxes yourself will save you money. A generic tax software package for a single return starts around $15 and some websites offer the service for free. If you’re going into a tax expert’s office (for example, H&R Block) tax returns start at $70. Meanwhile, a Certified Public Accountant (CPA) could charge upwards of $200.