Enter expenses on line 19. Add lines 21 and 22. Carry amount forward. Repeat.
Welcome to the world of the tax return; a realm that many Canadians find tedious, complicated and cumbersome enough to drive them to pay someone else to do it.
But those preparation fees can add up - from $50 at a clinic to thousands of dollars for a complicated return prepared by a certified accountant. Is it really worth it just to avoid a few hours of brainwork?
Preparing tax returns is not as intimidating as many think - it can actually be a rather rewarding experience because it saves money and can help understand your financial situation. And there's still time to do it before the Apr. 30 deadline.
Kurt Rosentreter, a certified financial planner at Manulife Securities is an advocate of self-preparing tax returns.
"It really pushes you into your personal finance in a healthy way, to give you knowledge about it that I just think any Canadian should have."
If your return is fairly straightforward - you are an employee and have standard deductions - and you have the time, interest and knowledge to do so, you should have the confidence to try it out, he says.
Diligent Canadians are already doing much of the preparation themselves by accumulating the required data, receipts and income slips, throughout the year. For many people it makes sense to follow through on that work with the last step.
All taxpayers have to collect and save data throughout the year. Organized people begin strategizing in November to ensure all necessary receipts (for example, donations or medical expenses) are recorded for the end of the calendar year.
There are two ways to prepare a return yourself - the pencil-to-paper method and the increasingly popular online or digital method.
For those who opt to fill out their taxes on paper, forms and guidebooks are available at Canada Post outlets for free. The only associated cost is the price of a stamp to mail it off. Bear in mind, however, that it could take several weeks to receive any refund.
Pencil-and-paper can be the most time-consuming method of tax filing - taking anywhere from two to 20 hours - because many people choose to go through a number of drafts and double-checks before sending off the final version.
Although the forms and instructions may seem overwhelming at first, only some of them apply to your situation and the guide breaks down what each line means.
However, for those not inclined to sit among a pile of forms, tax software programs can take some of the hassle out of filing. A basic electronic form can take as little as 20 minutes and up to three hours for more complicated filings.
Fees are usually under $20 for a standard personal income tax return - for individuals and families with deductions, such as RRSP contributions, medical or tuition expenses or tuition, and spousal and dependant credits.
Some really basic software is free for everyone and others are free for certain income levels.
Any software program chosen must be approved by the government because it has to link into their Netfile program in order to be uploaded into the CRA database.
Whether filing by hand or electronically, it saves time to have all your data including T4 slips, receipts for medical, transit or other deductions and RRSP and investment information on hand.
However, one major advantage to using filing software is the flexibility it affords, says Cam Moore, product manager at TurboTax, one of Canada's most popular tax software programs.
"If you get your T4 at work and you want to start doing it there you can, then take a break and do the rest when you have all your data in your pyjamas at home."
At $16.99 for each standard return, TurboTax begins with a quiz about your financial situation and guides you toward deductions that would apply. A filer simply enters the amount on their receipts when prompted and the software does all the calculations.
Using software also helps to avoid errors and missed tax credits, as some of them are done automatically.
Filers can also get free support from a tax specialist through e-mail, phone or chat.
"It starts at $16 bucks a return - a value versus going to a tax store. That's compelling because its designed by someone with the same expertise, but instead of spending a couple hundred bucks," Moore says.
However, people with the following issues might be better off seeking professional help:
- Fears about being audited or reviewed
- Problems finding all of their applicable deductions
- Anyone whose life situation has recently changed due to marriage, birth, divorce, or home purchase
- Self-employed people
- Filing for someone who has died in the past year Some taxpayers with more complicated returns choose to seek guidance once and do it themselves in the future, says Cleo Hamel, senior tax analyst at H &R Block Canada. Others in a consistent or simple tax situation choose to file their own taxes and use H&R Block once every few years for a review to make sure they're on the right track, she adds.
At H&R Block, which prepared taxes or some two million Canadians last year, personal income tax filing starts at around $80 for a simple return and can cost $150 for a self-employed person.
One benefit to filing through a service like H&R Block is that the upfront fee includes tax support for the full year - meaning a professional is available to help if you are reviewed or audited.
At TurboTax, if someone wants extra assistance they must remember to sign up at the time of filing for the audit defence add-on, which costs an additional $39.99.
Meanwhile, filing by hand puts any repercussions squarely on your shoulders.
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