We still have just under two months before that April 30 deadline hits to file your taxes. And while we’ve given tips for filing taxes yourself, such as the tax breaks that are available to you, what about when you’re paying someone to do them? Are there any tips you should keep in mind, or is it a simple matter of handing over your paperwork and letting the professionals do what they do best? Of course, there are tips for everything! And we’ve got some tips for you if you’re leaving the stress of filing your taxes to the professionals.
Know your situation, and hire someone qualified to deal with it
If all you have is a T4 and a few receipts from charitable organizations, your tax return is going to be pretty simple to file. But if you have a business, RRSPs, tons of deductions, and a myriad of other things that need to go onto your tax return, your return is going to be quite complicated, and you’re going to need a professional that can handle it for you. Just like any other profession, there’s the good and the bad when it comes to the quality of service you’ll get; and you want to make sure you stick with the good.
Know if you need a tax planner, a tax preparer, or both
If you just need someone to file your taxes for you, then choosing someone to do it might be relatively simple. But if you need someone to help you also plan your taxes, either for this year or next, then you may have to dig a little deeper.
“There are a lot of tax preparers out there who I would not call tax planners,” says Tim Cestnick, an author in Toronto and president of WaterStreet Family Offices. “They’ll do a fine job at filling out the forms if you give them information, but they won’t necessarily be able to save you much on tax in terms of particularly creative tax planning.”
Know the price
Different tax preparers work in very different ways. Some who are both preparers and planners will charge a higher fee than those who are just preparing and filing your taxes for you. If you’re hiring an accountant to do the job, it can cost hundreds but you’ll also be reaping the benefits of getting someone who’s fully versed and qualified to give you both a proper tax return to file, as well as advice on how you can save on taxes now and in the future.
Many consumers are familiar with the setup H&R Block, as well as many other tax preparers, use. This model allows you to bring in your paperwork, have your return done on the spot, and if you’re getting a refund, you’ll get it right on the spot. However, you won’t get the entire thing. These companies take a percentage of that refund in exchange for doing your taxes in the first place, but there’s only a certain amount of that refund they can take – 15 per cent on the first $300 and 5 per cent for any refund afterwards. Taking any more of the refund than that is actually against the law.
Know what you need to bring
You don’t want to walk into the tax preparer’s office only to find out that you didn’t bring all of the documents and paperwork that you need. Phone ahead, give the preparer some information about yourself, and make sure you ask what you need to bring with you to the appointment. Then, make sure you bring it!
Know how to file
When it comes to sending your tax return in, you have two options: you can use snail mail and send it in, or you can file electronically online. It’s not unlikely that in a few years, filing online is the only way people are going to be able to do it, and so it’s good to get into the practice now. Plus, you’ll receive a few benefits from filing electronically. Not only will you receive your income tax sooner, but it starts the audit clock sooner. The CRA has three years from the notice of your assessment to perform audits, and by filing sooner you’ll get your notice sooner.
Know that it’s your return
This one might seem obvious, but many people think that when they hire someone to file their taxes for them, the person who prepared the taxes is responsible for making sure that all the information is correct. That’s true to some extent, but only when it comes to completing them in a way you deem fit and accurate – not Canada Revenue Agency. Your name is on that return, and you’re the one that signs off on the fact that all the information contained within is true and accurate. If it’s not, it will be you that the CRA comes looking for.