Do you need help with your income tax return?
You can get help from an accounting firm, an independent tax professional, an economical franchised tax preparation service, a free tax clinic, or DIY with cheap or free online tools. It all depends on your mindset, your financial status, how complicated your situation is, and whether you’re a business owner.
Accounting Firm
A large accounting firm has the biggest team and lots of oversight and knowledge. Most are run very well with professional CPAs helping clients file, while others may only have co-op students working from January to April for personal income tax clients. If you are the type of person who prefers dealing with paper and face-to-face, this may be a good option for you.
Filing your taxes when you’re a salaried employee is pretty basic, as the employer deducts income tax from your paycheck and you get a T4 for your taxes. But as a self-employed contractor, it’s more complicated as it’s up to you to keep track of how much you owe in taxes. Help yourself by claiming business expenses to reduce your taxable income, including business advertising, supplies and tools, vehicle expenses, union dues, and membership fees, as well as accounting and bookkeeping fees. Although it may be hard to get all of the personal details that might be relevant no to mention likely the most expensive, a big accounting firm may have your back if or when the CRA does an audit.
Independent Tax Professional
There are many benefits to a smaller team with a lot of oversight. There’s more hands-on service and you’re likely to develop a personal relationship with your tax preparation pro. You may only be dealing with one specific person who really knows your personal situation and likely even family members. If you’re tech-savvy, it’s a lot easier to find an independent who has adopted tech to ease the workflow, if that is a priority for you. This is the best option for small business owners, and those with rental properties and non-registered investment accounts, as you can count on strategy and planning meetings and even a bit of hand-holding. It could take a minimum of two weeks for a personal income tax return, but it will probably be much less than the cost of a big accounting firm. even with the better service. If you’re a small business owner, read our article Tax Deductible Expenses for Small Business Owners to learn about some deductible expenses to keep in mind so you can maximize your tax return for the next tax season.
Franchised Tax Service
A franchised tax service like H&R Block is a cheap, easy, and quick way to take care of your income tax return. In addition to going to one of the pop-up in-person locations found in your local mall or superstore, you can upload your documents remotely and a “Tax Expert” will file your taxes. This type of service is good for T-4 employee income with RRSP contributions, but that’s about it. Don’t go this route if you have more than a few slips. Definitely do not go to one of these if you have any sort of complications with your personal tax situation or if you’re a business owner.
Do It Yourself
If you’re an introverted and tech-savvy control freak, this is for you! Just kidding…sort of. When you DIY, you can do your taxes in the comfort of your own home. You don’t have to talk to anyone. You don’t have to go anywhere and wear a mask. You can do it in your PJs! You’ll have control over everything to ensure it’s accurate because after all, no one else knows your money like you do. There are online tools that make it simple, such as WealthsimpleTax (formerly SimpleTax) which is pay what you can. It’s a CRA-certified tax software, as are these other pay what you can products: StudioTax, H&R Block Online, CloudTax, TaxTron, and TurboTax. If you’re interested in DIYing your income tax return, there are many very good Googleable blogs and videos out there to guide you, as well as courses that teach you to do your tax return. Remember that changes happen every year. While all of the information is readily available, you still have to take the time to learn about it and find out whether it applies.
Free Tax Clinic
If you cannot afford to pay for assistance, you may be eligible for a free tax clinic. These pop-up clinics are best suited for people who are low-income with a simple tax situation (no rental or business income). These Volunteer Tax Preparation Clinics, organized by the CRA in coordination with community organizations, are offered between February and April. Volunteers prepare tax returns for eligible individuals with a limited income and a simple tax situation.
There are free in-person tax clinics across Canada. Find the free tax clinic that is located closest to you and/or see what people have to say in your community Facebook group. As well, due to COVID-19, many community organizations are hosting free virtual tax clinics where volunteers will complete and file your taxes for free, by video conference or by phone.
If you plan on going with an accounting firm or an independent tax pro, you should contact them by mid-February to be sure they can process your file for the year. They are very busy during “the season” and many have a long line of people that need help. If you’ve put off filing your taxes for far too long, take inspiration and wisdom from that old Chinese proverb that states the second-best time to plant a tree is now. Read our article Filing 10+ Years of Personal Tax Returns which covers the six-year rule, the Voluntary Disclosure Program, Taxpayer Relief Provisions, and the General Anti-Avoidance Rule.
Creativity is Valuable
If you’re a creative entrepreneur, we’re here to make sure your financial situation reflects your value. The first step is making sure you aren’t stressed about the tax authorities. Learn more About UpSide. Unfortunately, we are unable to take new personal tax clients at this time, but we hope this article will lead you in the right direction for your situation, whether that be an accounting firm, an independent tax professional, a franchised tax service, online software, or a free tax clinic.