How to do my tax declaration?

You always have several options for preparing your tax declaration.

The purpose of this article is to show you them, then compare them and help you make the best choice.

If you want to make the best choice in your tax preparation, you need all the relevant information. And in your tax return, the right information can make a huge difference.

We’re talking about paying thousands of dollars to the government or receiving a nice tax return… Allowing you to pay off some debts, renovate your home, or even reinvest your money.

That’s why it’s important to weigh the pros and cons of all the possible solutions. Without further ado, let’s get started.

First, you have two choices: prepare your taxes yourself or delegate your declaration to someone else.

If you want to do your own tax return, you have only one choice:
1. Use certified tax preparation software such as TurboTax or UFile.

If you want to have someone else prepare your tax return, you have four choices:
1. Use government’s online or telephone platforms.
2. Use the services of a chartered accountant who is a member of the Ordre des Comptables Agréés du Québec.
3. Use the services of a company specialized in tax preparation. For example, GORA Impôts.
4. Use the services of someone who improvises himself as a tax preparer during the high season. For example, someone you can find with a sign on the street corner.

It’s all about tax expertise

No matter which option you choose to prepare your taxes, you should always ask yourself the same question: Will I get all my tax credits? Does it contain everything it should, and will it allow me to get the maximum refunds?

This is without a doubt the most important question to ask yourself. And the answer varies with your family and financial situation.

In short, if you have an uncomplicated declaration, it might be worth doing it alone, with an accounting software. On the other hand, if you have a more complex return, delegating it to a professional becomes essential.

Option #1: You use an accounting software, you prepare your tax declaration yourself.

There is a lot of software out there, but we recommend only two: SimpleFile or TurboFile.

There are dozens of others, but these are the only two you should trust. They are the most reputable and the easiest to use according to our research. They will guide you and they have all the important features. Therefore, they are the best options since they will make you miss as few credits as possible.

If you choose to use a software for your tax preparation, make sure it is NetFile certified. This is the CRA’s filing method for all individuals who prepare their own returns.

The good thing about software is that you’re in control, and it’s also often the cheapest way to prepare your taxes. In addition, some of them (like the ones we recommend) have review and advice services by tax experts.

On the other hand, there are also some cons. We don’t have much help, and we can make mistakes easily. And making mistakes in our tax returns is not a good idea. Plus, we don’t get advice for next year, or human contact with professionals. Of course, unless we use the revision service provided by the software… which comes with a significant price increase.

As for prices, they vary depending on your situation. You could pay as little as $20 for a simple return with a single T4. If you have a family and are self-employed, it could be quite a bit more, up to about $80. However, if you decide to use the expert review service, you should expect additional fees of about $80 to $120. So, if you expect to need advice and reviews, the total price will be over $100.

We recommend using a software program to prepare your taxes in the following cases:
– You have a simple return with only a few slips and less than $30,000 in annual income.
– You are very computer savvy and able to navigate platforms intuitively.
– You are a tax expert who knows your credits and exactly how to get the maximum tax return.
– You are on welfare.

Option #2: You use the government’s service, with free tax counters.

The Canadian and Quebec governments offer, in some cases, free preparation services. These services are offered by volunteers who operate free tax clinics.

To do so, you must first register for the service and check if you can get it.

The government offers this service only for people with low incomes or very simple tax situations. You can consult the following page for more information.

We recommend this solution in the following cases:
– You have a simple return with only a few slips and less than $30,000 in annual income.
– You are on welfare.

Option #3: You use the services of a Chartered Accountant registered with the Ordre des Comptables Agréés du Québec.

The accountant is the first choice to come to mind when preparing our taxes. However, accountants do not usually focus on preparing taxes for individuals.

Instead, they focus on creating and managing accounting systems for businesses and self-employed individuals. Accountants will prepare financial statements and corporate tax returns, prepare GST/QST tax returns, run payroll systems, etc. Their target clientele is not individuals, but businesses.

Of course, an accountant will do a very good job. An accountant with experience in tax preparation will be able to deduct all available credits. However, this is not a specialty for many of them.

Now, an accountant will usually charge very high prices for a tax return. A person with one source of income can expect to pay between $80 and $120, or even more. For a couple, the bill quickly rises to $200 for single cases with no children.

We recommend the use of an accountant for tax preparation in the following cases:
– You are an owner of income properties.
– You are a self-employed person who is registered for GST/QST sales taxes.
– You are a business and need to create and manage your complete accounting cycle, not just declare your taxes.

Option #4: You use the services of an accredited tax preparation firm

There are many companies that can prepare your taxes. However, you have to be very careful about who you trust with your tax return.

Trusting a company with your declaration is often the best choice in terms of quality and price. If you have a family, are retired or a student, you will benefit greatly from the help of a Revenue Canada certified tax preparer.

A company will offer you a human touch and expertise that you could not get on your own. They will make sure that our return is well done, and they will look for all the necessary points to have the best possible tax return. They specialize in taxation and tax preparation.

There are essentially three types of companies you can trust with your taxes:
– Large multinationals, such as H&R Block
– Smaller companies, such as GORA Impôts
– People who improvise themselves as tax preparers during the high season

The major difference between these two types of companies is really the price. Normally, you can expect to pay between 90 to 150$ per person at a multinational company. With a smaller company like GORA Impôts, you will pay between 60 and 120$ per person. With people who improvise themselves as tax preparers, you will pay between 20 and 60$ (we absolutely do not recommend this option, see below).

Between the first two choices, there is a significant price difference for essentially the same service offered. Even though sometimes there are smaller companies that have more tax expertise and will do a better job than the multinationals, which often employ mostly students.

At GORA, it is often our CPA who verifies the returns before sending them. In addition, we offer all the services required for the complete accounting cycle to self-employed workers and businesses. We are a mix of the third and fourth options with the low prices of the fourth.

What can also make a difference is the expertise and reputation of the company.

When you deal with a company, you have to make sure that they are really experts in tax preparation and have a good reputation. Basically, you have to make sure that your return will be done properly, if you can really trust that company.

For this, we recommend always checking Google and Facebook reviews for each company. Also, we need to make sure that they are competent.

Since H&R Block is a franchise, each office may have a different reputation, simply because it is run by someone else.

Also, always be sure to differentiate between a smaller company that specializes in taxes and someone who improvises as a tax preparer during the high season. If you are unsure, ask the tax preparer some of the following questions:

– How many years have you been preparing taxes

– Do you have any training in accounting, taxation, or tax preparation?

– How many tax returns have you processed?

If the answers don’t sound good, we recommend you keep looking. When it comes to preparing your taxes, you should have 100% confidence in the company that does them for you. This is because the consequences of a poorly done return can be catastrophic.

In the best case scenario, you will get great service and maximum tax refunds. But in the worst case, you’ll have to continually follow up with people who can’t be trusted, and then end up frustrated and in debt to the government. There are also other huge risks when you trust strangers who charge small prices for a poorly done job, such as identity theft.

So, always check carefully whether you should trust the company before you trust them with your tax return. This is true for both multinationals and smaller companies. Never trust someone who doesn’t have a good reputation or smells fishy.

We recommend using a certified tax preparer if:
– You have income that exceeds $50,000
– You are an employee who is entitled to employment expenses
– You are a self-employed person with income below $75,000
– You are a student with employment income
– You are a family with dependent children (especially single-parent families)
– You are retired and have more than $25,000 in income (alone or in a couple)

The choice of how to prepare your tax declaration is yours

However, it’s a decision that shouldn’t be taken lightly, and we recommend that you deal with experts.

Bottom line:

– If you are on welfare or have a very simple return, use a free tax counter.
– If you have a very simple return or are comfortable with technology, the best choice may be a software program. We recommend SimpleFile or TurboFile.
– If you have a family, are employed with more than $50,000 in income, are a student, retired, or self-employed, use an accredited tax preparation firm. However, use a reputable firm and make sure you pay a fair price.
– If you are self-employed with more than $75,000 in income and/or are registered for GST/QST taxes, deal with a CPA.

Average prices per person:

– With a tax software: $20 to $80 (expect an additional ~$80 to $120 for consulting and review services)
– With an accredited multinational tax preparation firm: $90 to $150
– At a smaller accredited tax preparation firm: $60 to $100
– With an accountant from the Ordre des Comptables Agrées du Québec: $100 to $200