Can you file taxes on your own?

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Yes, you can file taxes on your own. The question is: should you? The CRA and tax software applications are striving to make the process easier and easier and for people that have simple employment income with no deductions it makes sense to file on your own. The problem is that even the best software wizards aren’t able to explain all the nuances and possible exceptions involved with filing taxes.

There are countries that charge a flat tax and that’s what you pay. There’s no need to even file your taxes unless you are self-employed or a business. However, in Canada we receive tax-breaks from the government through tax credits (donations, medical expenses) or income-based payments (child tax benefit). There are best ways to report these expenses to optimize your tax credits. Furthermore, if you don’t know about them you might miss submitting them all together.

As soon as you’re self-employed or own a business the picture becomes more complicated. Last year we brought on a couple who had been filing their own taxes for the last number of years using Turbo Tax – they overpaid almost $10,000 in taxes due to under-reporting expenses and not optimizing how they reported the income. The cost of trying to DIY your taxes could be far more than the fee your tax preparer or accountant is charging you.

Not all tax preparers and accountants are created equal

On the flip side, it’s equally important to ensure you are working with a good tax preparer or accountant. This can be difficult to determine as it’s likely that it’s not your area of expertise. A good tax preparer should be able to explain to you why you’re paying or getting a refund and what is affecting your balances. They should be able to explain this clearly – it’s just math. If the professional you’re working with won’t explain clearly or makes you feel like they’re a wizard working magic – chances are you should be getting a second opinion.

Check out our upcoming workshop on to get ready for tax season.  Alternatively, contact us for our expenses tracking template or to book a tax appointment.

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