Who doesn’t love tax season? We finally get back what was rightfully ours…
Wait, did she just say ‘rightfully ours’? That’s right, I did. The government is paying us back based on eligible deductions, as well as what is frequently an over collection of income tax. The funny thing is most people think of this as a ‘bonus’ cheque in the mail. In reality, we earned that income months ago (or spent it on an eligible deduction). Problem is, it’s not logistically possible to manage all the deductions in real time so we do this catch up exercise once a year. Which begs the question…shouldn’t we be charging interest…to the government? Or what if we did a “forecasted” return based on “forecasted” amounts? That would be nice…I digress…
Where was I? Oh yes, tax season. Outsourcing.
Many people likely have what would be deemed a ‘simple’ tax return. This would consist of a T4 which reports their income, perhaps some investments, and a few deductions such as transit passes or medical expenses. For these people, a software like TurboTax is a great, efficient, affordable method for filing their tax return.
However, even simple returns can be stressful if you are uncertain as to how deductions work, or unclear on what should be reported, and what does not need to be reported. Why can I claim a monthly transit pass but not individual tickets? How do my employer paid premiums to my medical plan impact my medical deductions? The stress involved with this and the concern over making an error can sometimes justify outsourcing the task to trained individuals.
In other cases, an individual or family may have a more complicated tax situation. Income splitting, investment properties, tuition credits form children, foreign income, relocation expenses or divorce can all make the process slightly more complicated.
Whether you are faced with a simple but stressful tax return or a more complicated situation, sometimes it makes sense to put a price on your sanity and time and outsource the task. Although there are several great tax software programs designed for a seamless user experience, sometimes even these tools cannot be enough motivation for someone who is not comfortable with the task, or just does not have enough time.
Note: If you think you have to pay to file your tax return think again! There are several free software programs available. TurboTax has great marketing and has successfully dominated the income tax landscape, however it is NOT required to buy their software to do your return! However, some programs are better than others at ‘optimizing’ your return. Pros and cons. For a return with only a T4, why pay for TurboTax?
H&R Block offers services at a reasonable starting price, which increases based on the complexity of your return. Although the cost may be difficult to come to terms with, just think about how much YOUR time is worth. Sure, the fee may reduce your income tax return slightly, but the time you saved can be spent earning some cash, or on a family outing, or at the gym (and you didn’t think you had time for the gym, ha!). Now, I’m not saying we should be oblivious to difficult tasks- in fact, it’s critically important to understand your tax position in any given year. For some people however, it’s just not their cup of tea to sift through receipts and interpret rules – in that case, take advantage of the services that are offered to make your life easy and simple!
BONUS: Since you left the task to the professionals, you can have peace of mind that they will work with you to ensure all documentation is appropriately compiled for potential future audits.
Are you going to file your own tax return this year or delegate the task to someone else? If you are doing it yourself, what tax software do you like? I used H&R Blocks free software this year, and I thought it was very comparable to TurboTax, without the price tag.
Free CRA approved software: http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/crtfdsftwr/menu-eng.html
Overlooked tax deductions that can save you money! http://globalnews.ca/news/2494875/6-overlooked-tax-deductions-and-credits-that-could-score-you-a-big-return/
H&R Block: https://www.hrblock.ca/file-in-an-office/experience/