While you might speak to an Ottawa mortgage broker before taking out a home loan, and you’d never invest in the stock market without speaking to a broker, preparing and submitting your taxes works a little differently. It’s a highly detailed process that takes many aspects of your life into consideration and, if it’s not done properly, you could come into question with the government. Yet, it’s perfectly acceptable for you to go it on your own and do it yourself, instead of paying a large chunk of your refund to professional tax specialists to do it for you. And whether or not you actually should prepare your own taxes is a question thousands of Canadians face every year. Because sometimes, just because you can, it doesn’t mean you should.
While you may think that preparing your taxes is a simple matter of claiming your income and those few charitable receipts you’ve collected throughout the year, truthfully if you don’t prepare your taxes right you could miss out on huge deductions – which will also cut into your refund. According to the Canada Revenue Agency, of the 10 million Canadians that do their own taxes every year, 25% of them are not done correctly. People miss credits for sports programs, self-employment deductions, and a list of other things each and every year on their taxes, all because they simply don’t know about them; and that’s where an expert can come in handy.
Tax specialists deal with tax issues every day of the year, not just at tax time; and they know about all the deductions and claims you can make, not just the most common ones. Aside from your actual return, a specialist can also give you further tips and advice on how to help increase your tax refund, and save your money, the following year. But, just because a tax specialist is most educated than you about taxes in general, still doesn’t mean that these professionals are necessarily the way to go. They will after all, take a percentage of that larger refund they help you get back.
If you know that you are prepared, and you know all the tax rules, and you’re confident that you can do it alone, there’s really no reason to pay an expert. There are after all, still 75% of Canadians that file their own taxes every year and do it the exact some way the pros would. Just make sure that you know what home business expenses to claim (remember you can’t claim any part of your mortgage in Canada,) that you have your T4 slips, RRSP contribution statements, medical receipts, and anything else that you know can go on your tax return.
Truthfully, no one can tell you whether or not to do your own taxes or take them to a professional except for you. Only you know how comfortable and prepared to do it yourself – but be honest with yourself when assessing your skills. There’s a major difference between knowing how to do them, and buying some software that you think will do it all for you.
