DO NOT USE: Contact David Lucas
Even as the popularity of tax software and online tax tools grows, there is a solid contingent of Canadians who prefer to have a professional prepare their personal tax returns.
Ten million Canadians electronically filed their taxes through a professional income tax preparer in 2009, according to personal tax firm Liberty Tax Service.
While my husband and I have always used a software program to prepare our returns, most of my friends use an accountant.
"I don't have the time," says one mother of two, who has used an accountant to prepare her family's tax returns for the past 10 years. It's worth the money, she believes, so that she doesn't have to worry about how to apply the new home renovation tax credit or how to claim her children's daycare and recreational programs.
One father of two I know pays his accountant $250 to prepare his family's taxes each year. "It's not a lot of money for the convenience," he says. "He's up on the tax law and knows all of the credits and loopholes."
Another friend, a single professional, pays her accountant between $250 and $300, depending on the complexity, to prepare her return every year. "I don't mind outsourcing certain things if it's going to free my time up. I'd rather spend the extra time on my job than doing my taxes."
She compares having a professional do her taxes to going out to a restaurant. "I could make dinner myself, but it's a luxury to have someone do it for me."
Cleo Hamel, a senior tax analyst with tax preparer H&R Block, says clients come to the firm with a variety of tax situations. While some have complex returns that require assistance, others are simply too worried about their ability to complete the forms properly.
"It's a comfort level in terms of understanding what it's all about. Have you always handed it off and just signed on the dotted line?"
Some people visit a tax preparer every few years just to make sure they have been doing them correctly, says Ms. Hamel. At H&R Block, she sees new clients come in when the government introduces new rules or credits, such as the children's fitness credit or home renovation tax credit.
While the children's fitness credit may seem simple, you have to consider which parent should claim it, Ms. Hamel points out. Some clients have tried to take advantage of the home renovation tax credit in 2009, but cannot claim it as the project did not meet certain requirements.
"There are so many things that can affect your tax return, you may remember to take advantage of some of them but not others," she says.
It makes sense to "even just talk to a professional once every few years when there is something new, either in the rules or in your situation."
You should consider getting some professional advice when your life situation changes significantly. If you've recently had a child, started a business, or moved from one part of the country to another, your taxes will be affected.
The economic downturn and rising unemployment rates may also have left Canadians with new tax issues to handle, such as how to claim employment insurance benefits or report pulling income from RRSPs.
"The minute you do something out of the ordinary, you should start researching so you can take advantage of all credits available or consult someone to do it for you," says Ms. Hamel.
If you just have a T-4 and an RRSP slip, a software program could easily handle the work for you, but you must make sure to give it all the necessary information.
"We've had very simple things people overlooked using software," Ms. Hamel cautions. Some have forgotten to put in their address, resulting in the wrong provincial rates, or have put in so little information that it triggers credits.
"The Canada Revenue Agency will pick up on those errors and then you get a notice of assessment."