Skip to main content
Open this photo in gallery:

Working with someone who can stay up to date on changes to tax laws can ensure clients are claiming all the deductions and credits they’re entitled to.blackred/iStockPhoto / Getty Images

Sign up for the new Globe Advisor weekly newsletter for professional financial advisors on our newsletter sign-up page. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know.

As tax season rolls around and cheap technology-based solutions beckon, advisors caution there’s no one-size-fits-all way to file returns. Nor are there any guarantees that do-it-yourself filing methods will save money in the long run.

“I’ve seen quite a number of people complete their own returns incorrectly, causing unnecessary tax bills that far surpass the average tax preparation fees,” says Steve Ambeault, certified financial planner (CFP) and chartered professional accountant at CS Tax in Edmonton.

For clients whose files involve additional complications such as large investments, rental properties, self-employment or out-of-pocket medical expenses, Mr. Ambeault recommends hiring an accountant to prepare the return for at least one year.

“An individual could potentially use that return as a bit of a guide for how to do their returns in the future,” he says.

Those with very straightforward returns involving only a few tax slips should be able to complete their own return accurately using an off-the-shelf, Canada Revenue Agency (CRA)-approved software such as TurboTax.

In either case, it’s absolutely imperative to file both electronically and on time, Mr. Ambeault stresses.

“We’ve noticed an uptick in the number of errors that occur on the CRA side when submissions are made by sending in printed forms,” he says. “And, increasingly, the CRA appears to be charging applicable penalties automatically rather than using discretion.”

The pros and cons of filing yourself

For this reason, clients should have all their documents in order before filing, says Ramanpreet Kaur Rai, financial advisor at Hunjan Financial Group Inc. in Mississauga.

She suggests clients refer to their notice of assessment for the previous year as a guideline to ensure they haven’t missed any important documents or tax slips before filing.

“The CRA will not look to make sure you have claimed all the deductions you’re entitled to,” Ms. Rai says. “T3 slips are always a problem as they’re issued so late.”

Not all the slips that get sent by mail end up on the CRA site for download, so it’s important to keep all the physical copies so they don’t get missed on the return, Mr. Ambeault says.

Tax return checklists readily available online can also serve as a guide to prompt individuals to think about the various items that may affect their taxes, he adds.

For those planning to file on their own, it’s important to start early.

“If you’re preparing your own return, you’ll want to leave plenty of time to do some research or to go to an accountant if you run into trouble,” he says.

When to turn to a professional

The probability of that trouble occurring may need to be carefully assessed especially when maneuvering certain personal or financial life events

“In other words, how simple is your tax situation?” asks Tony Salgado, president and founder of AMS Wealth Inc. in Vaughan, Ont.

“Some life changes would highly suggest you should seek the help of a professional. These would include getting married, divorced or a birth or death in the family or both,” he says. “These are all personal life events that can affect your tax situation and future planning opportunities.”

Adding further layers of complexity are financial items that require consideration, he says.

“For example, did you significantly increase or decrease your income? Receive an inheritance? Were there new debt payments that may allow for certain deductions?” he asks.

“With blended families becoming the new normal, individuals leaving and entering Canada, and the emergence of the new gig economy, a ‘simple’ tax situation is not easy to come by.”

A professional tax advisor can help clients better understand their obligations and the tax implications of their investments and optimize their portfolios accordingly. By ensuring compliance with all relevant tax laws, taxpayers can also reduce potential CRA penalties and minimize the risk of disputes.

Working with someone who can stay up to date on changes to tax laws can ensure clients are claiming all the deductions and credits they’re entitled to.

“The Canadian tax system is based on layers and layers of articles and subjects that have been used to adjust and adapt existing laws,” says Stefano Pannu, principal and CFP at Noble Pannu Wealth Management in Kelowna, B.C.

“The tax system is always evolving and will continue to evolve. Keeping abreast of all of the changing rules and regulations is virtually impossible.”

That’s why, he says, “the best way to file your taxes is through a professional.”

For more from Globe Advisor, visit our homepage.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe