While taxes are an annual routine, financial circumstances can fluctuate from year-to-year and many filers are left wondering if their income and assets could benefit by having an accountant handle their tax return.
The following profiles will break down the types of tax returns that are best handled by an accountant and which benefit from using tax-filing software
TAXPAYER X
Taxpayer X works one full-time job. She is not married, nor does she have any children. She owns her home but has not yet started an RRSP or purchased any major assets. Taxpayer X made one charitable contribution of $100 and paid back the minimum to her student loans.
When Taxpayer X files her income tax, her best option is personal income tax software.
TAXPAYER Y
Taxpayer Y works full-time but changed jobs during the year. His spouse is self-employed and they have two dependent children. They own their home, a lake house, and a vacation rental in Mexico that makes some profit. Both Taxpayer Y and his wife contribute to RRSPs and they share an investment portfolio. Taxpayer Y made significant donations to several charities and often takes clients on business lunches.
When Taxpayer Y files his income tax, his best option is an accountant or accounting firm.
Accountant or tax software?
While the two cases above cover extremes of income tax filing, they represent a good baseline to judge your own tax return needs.
Personal income tax preparation software is available at a low cost and offers a convenient, speedy way to put your finances in order. Professional accountants may cost more, but they can make the most of your return with more advanced software, answer any questions you might have, and can deal with any complex issues involved in your finances.
Either way, be attentive to important financial documents and keep orderly files to ease the stress of income tax filing.
Still not sure what your best option is? Contact Liu & Associates for guidance!