Sarah Mills: Tiger Woods should know better after another DUI case
Sarah Mills says Tiger Woods could easily pay for a car service, and he should also have an NDA to keep his business his...
TORONTO — Imagine sitting down with a messy pile of T-slips and old receipts to file your tax return one line at a time. It sounds daunting — and a reason why even people with straightforward returns may choose to hire an accountant.
With the advent of self-filing software, however, the majority of people are able to file their own taxes without professional guidance, or the cost that goes along with it. But the key is understanding when to recruit extra help.
“There’s a lot more simplification of the process with the online platforms,” says Andrea Thompson, a certified financial planner and founder of Modern Cents. “You could do it in the comfort of your own home, whenever you want and you can limit your tax-filing costs.”
Self-filing taxes is about a mindset shift, Thompson says.
“For youth growing up today, filing their taxes (themselves) might be more comfortable in an online environment because that’s just how they were brought up,” she said, while older generations had to make the move to e-filing from doing it by hand.
When deciding whether to hire help or do it yourself, Thompson suggests looking at the level of complexity of your taxes.
If it’s a simple situation — a full-time employment T4 slip and perhaps registered savings contribution slips, without additional credits or deductions — online platforms can work well, she says.
“Most people don’t have a complex situation or just have maybe a couple of tax slips that they need to input into the software,” she said. “Where I think people may need some guidance is in terms of which credits and deductions they may not qualify for.”
Corby Simpson, who owns a tech company, has been filing his taxes himself for the last 20 years.
The motivation was simple: “Curiosity and saving money,” he recalled. He discovered an online tax filing system while working at Staples two decades ago.
“It was $100 (to get help), and when you’re a starving student, that buys X amount of packages of hotdogs and potatoes and cheese and onions.”
Every few years, he said, a new slip or expense would get added to his taxes — with changing property ownership and a growing family — and he’d educate himself on how to handle the extra component, sometimes through online forums where people had similar questions and expertise.
Websites such as TurboTax and Wealthsimple, among others, can help streamline returns. The Canada Revenue Agency has also compiled a list of free or pay-what-you-want tax software on its website.
The deadline for most Canadians to file their taxes is April 30, while those who are self-employed can file returns by June 17 (since June 15 this year falls on a weekend).
The CRA can be a tax filer’s best friend, says Brian Quinlan, a chartered professional accountant with Allay LLP. The agency not only provides a list of online sites for simple online filings but also details help through its newsletters and how-to guidance.
“You don’t think of CRA being helpful but the website is very, very robust and detailed,” Quinlan said. “You can search line by line (about) what CRA is asking for, why it needs to be reported or what the source would be.”
For self-filers, watch out for “lifestyle tax,” says Quinlan.
“Perhaps they’ve started a new business. That’s a big, big tax thing,” he said. “If they’ve had a baby; or if they’ve got married, separated or divorced; or someone has died in their family.”
“All these things have tax implications and perhaps, complicate the filing,” he added.
There may be chances of an error. But it’s not a serious problem, said Quinlan.
“You can always amend a return.”
Despite online resources, some people may still not be comfortable or confident enough to trust themselves with numbers, says Thompson.
“Regardless of how simple the online software may make it, it doesn’t take away people’s innate confidence or anxiety about the task,” she says. “Not everyone is going to become a tax preparer for themselves at the end of the day.”
That’s especially true with complications such as investment income, large capital gains or owning rental properties.
That’s when hiring an accountant could be beneficial — bringing not only peace of mind but also knowing the job has been done right.
Besides handling returns during tax season, an accountant can advise how to manage and save on taxes. Quinlan says his firm charges anywhere between $400 and $2,000, depending on the case’s complexity.
It’s also about hiring the right accountant — and trusting them with your finances.
“It would be a bit of chemistry … whether you think you can get along with them very well,” Quinlan said.
The taxpayer should have confidence in their accountant that the job will be done right — maybe get a referral from a friend or co-worker if they’re happy with their accountant and make sure the returns get filed on time, he said.
Whether DIYing the taxes or getting help, the answer lies with the tax filer and their comfort level.
“You need basic math. You need some patience and you need to feel confident,” said Thompson.
This report by The Canadian Press was first published March 18, 2024.
Ritika Dubey, The Canadian Press
