The Customs and Revenue Agency in Canada requires all residents to file their income declarations by April 30th each year. If you fail to comply within the given timeframe, you could be facing a hefty penalty. If you find that you owe any further taxes, these should also be paid by April 30th to avoid being charged interest on the unpaid amount.
If you’re incapable of paying the owed taxes, you have to make sure that you still send in your return by the given date to evade paying a significant penalty. Even if you cannot pay the taxes you owe, make sure you file your return by the April 30th deadline to avert paying a substantial penalty. Fifty-seven percent of 30.2 million tax returns in 2020 were filed using Efile. This is the system tax preparers use when they file online on behalf of their clients.
Since so many Canadians are opting to use businesses or somebody else to do their taxes, let’s look at some things you should consider when hiring an accountant or a tax preparation service to complete your personal tax returns. Do your homework before paying someone to get your taxes done.
For over ten years, tax preparation firm Aridan Accounting and Tax Services has provided money-saving services in and around the Greater Toronto Area. But even if you hire someone to do your personal tax returns for you, you still need to come prepared. There are certain benefits to hiring experts. They help minimize your tax liability and prepare your tax return, but most importantly, help you save money. Firms like Ardian also have extended expertise in the alternating CRA tax codes.
That’s a choice you will have to make, but since Canadian Tax Codes are continually changing, it can be hard to keep on top of things. If you don’t consider everything, minimal diversity in the CRA Tax Codes can mean hundreds or thousands of tax liability dollars. This is why you should consider someone to help you with your personal income tax preparation. And experts can help you keep as much of your hard-earned income as possible. But there are specific measures you can take to help as well.
Do you only have a simple return with a T4 without a lot of deductions, or do you have endless items that need to be reported, like income from rental properties or a small business? Every situation is different, and it’s vital that, however, or whichever tax preparer you hire has the qualifications and offer the services you need to help you prepare properly.
One of the most important aspects is that you are comfortable with whoever is doing your taxes.
Beforehand, you must decide if you simply need someone to fill in your tax returns for you or if you also need and expect them to help you with advanced tax planning.
A lot of tax preparers shouldn’t be able to call themselves tax planners. Even though they do an excellent job filling out your forms, once provided the information, they can’t help you save taxes since they don’t offer any creative planning. Therefore you must do your homework on different firms first.
Set fees are a common thing amongst tax preparation services, and they can vary vastly depending on the complexity of the tax return. A tax planner who prepares returns will often cost more than someone who simply does returns.
You may find yourself paying a bit more for qualified professionals, but it can be worth it in the long run. Find out what the fee includes for preparing your tax return. Does it have year-round support if you end up being reviewed by the CRA?
Finding a tax preparer that includes the follow-up and does your audits for you can be a great advantage. Especially if you don’t have to pay extra for that service.
If it’s your first time filing a tax return, set up an appointment with your tax preparer. Ask what kind of documentation you should bring with you. It’s quite common that you will end up having to gather more info and documentation before they can start preparing your return. Many tax preparers have a great way of teasing the information from you for things that might not have occurred to you. For example, did your kids go to day camp? Did they take guitar lessons, etc.?
Some tax preparation companies are only open during the tax season, while others are open all year round. If you have filed taxes in the past, you can look at your previous returns to understand what you might need. Since most people’s taxes don’t vary dramatically from year to year, you should be able to figure out what is required. And should you have any doubts if the previous returns were filed correctly, you can always ask the preparer to look at them again.
If you miss providing any information to your preparer, you can suffer negative consequences. No matter who does your tax return, you have full responsibility as soon as you sign your name. And if something should come back and bite you, it falls on you and not on the person who did the tax returns.
Is it worth hiring someone? Yes! No matter how large or small, anyone can benefit from professionally prepared personal income tax preparation. In most cases, excellent tax preparers can produce significant reductions in tax liability, which means bigger tax refunds and more money in your pocket.
