I know people who pay between $40 to $80 each year to have a CPA (Chartered Professional Accountant in Canada) or tax preparer, prepare their income tax returns for them, when all they have to report is employment or pension income, and maybe interest income. They are basically paying someone to transcribe a number from their T4 and / or T5 slips onto a line on a tax software program, and to then press a button, that calculates and prepares your tax return.
You can buy very good tax software packages for about $20 and do it yourself.Better yet,there are many free tax software programs that are suitable for simple tax returns like the one I just described. I counted 8 free software programs that have been certified for Netfile by the CRA for the 2020 tax year. They include familiar names like TurboTax, H & R Block, and Wealthsimple. For a list of the free certified tax software options click the link below.
There are also paid versions of the tax software if you require some help. With the paid versions, the software usually takes you through a comprehensive interview, gives you warnings if it thinks you missed something or made an error, and the company offers online or telephone assistance if you have questions. CloudTax says for $29.99, they will have a tax expert review and file your return, and provide unlimited suppport. I’ve never used them, so I can’t speak to the experience. Most of the income tax packages for individuals cost around $20.00. I counted 16 different tax software programs that have been certified on the CRA website. They can be found on the link below.
Paid tax software certified by CRA
Another advantage to using tax software is that your tax return is digitally stored for you online, so you have easy access to your return if you ever need it. Then the following year, if you use the same tax software, it pre-polulates the next year’s tax return for you with your personal information, so you don’t have to enter it again. Also, by doing your own tax return, you get to know your way around the T1 and become less initmidated.
Of course there are advantages to using a professional accountant or tax preparer. If you are pressed for time, have better things to do, have more than just a simple return, or just can’t be bothered, then go ahead and pay someone. CPAs are also regulated and carry professional liability insurance. This means you can feel comfortable in the knowledge that if they screw up, you can sue them and there is an insurance policy that can compensate you for any losses. Not so, if you make a mistake on your own. Similarly, tax preparers don’t belong to any regulated professional association and are not required to carry professional liability insurance, so you may have limited recourse if a tax preparer who is not a CPA, screws up or gives you wrong advice.
I’ve been doing my own taxes for years using Ufile software (ever since my accountant screwed up and I was re-assessed !) and have been happy with it. Since I’m a self-employed attorney, my tax return is a little more complicated so I use Ufile Premium. This year it costs $29.99. But Ufile also has a free version which should be suitable for people who you just have a simple return. By the way I’m not endorsing Ufile. I’m just telling you it’s the tax software that I use. Please satisfy yourself as to which tax software, if any, is right for you.
Check out the list of certified tax software options on the CRA website. Try one or more of them for free, and then decide whether you still want to pay a CPA or tax preparer. You might save a few bucks.