It’s the tax season, and we are sure you’re getting nervous. Canadians and residents of Canada have to pay income tax on their worldwide income. In most cases, you wouldn’t be expected to pay taxes twice, thanks to double tax avoidance treaties. However, you still have to report it in your Canadian taxes. It’s how you can get the foreign tax credits and deductions for any foreign taxes that you have paid on income derived from outside Canada.
When it comes to personal taxes, you can go for the tax season your way – either by filling it up yourself or take the help of an accountant. If you’ve an office job and are used to of paperwork, you probably wouldn’t need to go for the latter. For complicated tax scenarios, a tax preparation software or a tax accountant might be the best way to go. Let’s take a look at what will work for you.
Using a Tax Preparation Software to do Personal taxes in Canada
These often cost much lesser than that of an accountant or tax lawyer. It’s easy to prepare your individual tax returns at home, rather than to go and pay more for an accountant, saving you money and time. Many come with relevant tax forms fields you can fill in easily, and even claim your tax refunds yourself.
When do you need an Accountant’s hand?
If you are self-employed or have your own business, you can still do your personal taxes yourself. The calculation of business income and deductions sometimes may seem a little intricate, and you can go wrong. How much depreciation should you go for when it comes to your assets? How are you paying your GST and HST? Do you need to change your business model to save more taxes?
Also, while you can get the tax refunds with a tax preparation software, you can always miss out on some important ones. As a business or a self-employed person, there are several other tax deductions and credits you may be eligible for.
Get an Accountant You Can Trust!
Often, individuals, freelancers or just people who own business aren’t that good with documents and taxes. Accountants help you in seeing a clear picture of what’s going on in your business, understand your financial statements and even show you ways to get more tax refunds by using different tax optimizing tools while your individual tax return preparation.
Beware of seasonal tax preparers in Canada
During the tax season due to high demand a lot of people join the workforce in tax profession claiming to be tax experts. Though tax preparation in Canada does not require special license, but, tax advise and counselling in expert capacity does require license and falls under the regulated profession. As far as individual tax preparation is concerned in Canada, you can get the filing done from anyone but when it comes to tax advice you should only take so from a licensed professional usually a CPA or a tax lawyer.
There are No Guaranteed Refunds or Special Accounting
If some accountant or tax preparer in Canada advertises for a guaranteed tax refund, always remember that there is no special accounting which can get you refund more than you are entitled for. It is important to note that you are responsible for your own tax return not the tax preparer.
You would want someone you can trust. Remember, the taxpayer is the person accountable for if penalties and liabilities knock your way later on. Does your accountant guarantee you some assurance should you face an audit? Does your accountant offer any liability insurance should they make a mistake?
If you are still wondering whether you should hire an accountant for you this tax season, the rule is simple- if you believe it’s too complicated, you should take the help of an expert.
Maroof HS CPA Professional Corporation is an accounting firm in GTA offering services in individual tax preparation services, corporate tax preparation services, tax advice and planning for individuals and corporations in Canada, Complicated tax matters for US and Canada, and a wide range of accounting services. If you need help with current year personal taxes or corporate taxes, non-resident tax issues for Canada, or backfiling of income tax returns – you can give us a call.