It’s just about time to pay the tax man: are your financial affairs in order? Here are 5 things to consider when deciding whether or not to hire a professional accountant.
1 – Your life has changed in some way from the previous year.
Everyone experiences change in their lives as time goes by. You may have married, separated or divorced; bought or sold an investment; put money into, or taken money out of a retirement plan; or, started a proprietorship or partnership business. Has something new happened in your life? How will the change affect your income tax return?
2 – You don’t have knowledge of your eligible deductions under the Income Tax Act.
Much of the information in the Income Tax Act relates to the nature and eligibility of allowable deductions. Yes, there are standard deductions. However, there are many types of deductions which may be available to you under certain circumstances. If you don't understand the question being asked, or the impact of your answer, you're not going to file an accurate income tax return. It would be a shame to miss an opportunity for income tax saving simply because you were not aware of a deduction. Can you recognize all your eligible deductions?
3 – You are not good with numbers.
This is a self-assessment issue, but still an important one. I'm not just thinking about adding, subtracting and multiplying. I know computer programs can crunch the numbers for you. I'm thinking about the basic issue of entering or writing down the numbers properly. Simply transposing two digits from a T4-A slip, an innocent mistake, can result in more problems than you would imagine. Are you good with numbers?
4 – You are not a ‘details’ person.
Details, details, details. You need to keep track of details. Your income tax return requires you to enter details. Canada Revenue Agency wants to know about your details. The information in your income tax return requires double-checking and maybe re-checking again. The more information you enter on your return, the more the possibility of forgetting something, entering the information in the wrong place, or entering the wrong numbers. Checking and double-checking your own work matters. Are you a “details” person?
5 – You do not have a simple income tax return.
Some people have more activity in their financial lives than a full-time job, owning a home with a mortgage, contributing to a deductible retirement plan, investing in shares on the stock market or making contributions to charities. Self-employed people will fall into this category. Are you a person with a more complex financial life?
You may want to consider hiring an income tax professional if you recognize any of the above reasons apply to your situation.
A blog cannot deal with all aspects of a subject and is not intended to replace professional advice. Its purpose is to highlight information and identify areas of possible interest. Anyone wishing to discuss this blog or to make any comments or suggestions about this blog is invited to contact our office.