We can count on tax season every year – and these days, with the price of everything on the rise, you might be tempted to try doing your taxes yourself versus working with an accountant.
In fact, cost savings is the most obvious reason people choose to tackle their own taxes.
However, there are pros and cons to using tax preparation software, so you’ll want to be sure you are making the right decision for you.
Before you do your own taxes, consider the complexity of your financial situation.
If your tax situation is simple (one job, few tax slips), then online software is an option. TurboTax and UFile are convenient, intuitive, and user-friendly choices if you only have one employer, few investments and are comfortable with tax rules.
The other major benefit to doing your taxes yourself is that you don’t require an appointment with anyone. Tax season is the busiest time of year for accountants. If you’ve waited too long, you might feel like you have no other choice but to do your taxes by yourself.
That said, doing your taxes when you’re feeling stressed and crunched for time is the worst!
Working with an accountant allows you to hand over your slips and relax, knowing they understand the latest tax changes and credits and can apply them to your situation.
An experienced accountant is also more likely to save you money than a software algorithm.
Tax preparation software programs also have their limitations when it comes to dealing with more involved financial situations, wealth management and planning.
Simply put, you don’t get the same level of attention and care that you would from a hands-on professional.
We recommend you strongly consider filing your taxes through an accountant if you are…
- Starting a small businesses or partnership
- Supporting dependants
- Renting properties
- Managing stock options
- Earning income outside of Canada
- Donating significant assets or charitable contributions
- Undergoing a major life change like buying a house, getting married, or having a child
These scenarios are not as straight-forward as filing a single T4 slip. You will want to have the insight and expertise of an accountant to ensure that everything is documented and filed properly, and to take advantage of any tax credits you might be eligible for.
An accountant will also have your back if you are ever audited – not something you want to risk facing alone. Audits routinely happen to freelance employees and small businesses with unusual tax situations.
So, which path should you choose? When it comes to tax preparation, you can save both time and money when working with a professional.