Should You File Your Own Income Tax Return?

In Canada, taxes are due on the last day of April. If you're unsure whether you should do your own taxes or hire an accountant to prepare them for you, this article can help you decide which option is best for you.

Advantages of doing your taxes

There are a number of advantages to preparing your own income tax return. The first and most obvious one being that you'll save your accountant's fee.  Accounting fees can be as low as $40 if you go to a firm that hires assistants to help with tax records around tax season. However, if you have a more complicated tax situation, you might consider hiring a CPA, which can cost more.  If you choose to do your own taxes using tax software that allows you to submit your return, nothing prevents you from filing on the very last day that taxes are due. This should appeal to people who need a bit more time to itemize their expenses and organize their receipts. If that sounds like you, we can think of a few applications that might help.  Finally, when you decide to file your taxes yourself, you have an extra incentive to seek out the maximum amount of tax deductions. This will require a bit of research, but ultimately, taking matters into your own hands will give you more control over the end result.

Hiring an accountant

The CRA website contains a wealth of information that can help you get the most out of your Canada tax return. But no matter how much you learn, your accountant will probably always have more tax knowledge than you. In other words, hiring an accountant can help you focus on other things.  In addition, a good accountant will provide you with an accurate return. This means that you can rest easy knowing that your return contains no mistakes and that you'll have nothing to fear in the event of an audit by the CRA.  Although hiring an accountant involves a bit of preparation, this option will be less stressful in the long run. If numbers aren't your thing, you can just show up with a shoebox full of receipts and your vehicle mileage record without crunching any numbers.

So what should you do?

Although doing your own taxes will help you save on accounting fees, consider how much your time is worth. How much money you could have made if you spent that time working instead of doing your taxes? For instance, you might have questions that require CRA assistance.  Yet, if the business is slow and you have nothing else to do, any time spent doing your taxes is probably a non-issue.  If you have a complicated tax situation with many sources of income and expenses, you should definitely consider hiring a professional to help. That being said, accountants are very busy around tax time. This means that you'll need to get all of your receipts and documents in order several weeks ahead of the filing deadline, which will require some organization.