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Do your taxes need professional help?

We got the lowdown from a tax pro and a lifelong DIY-er

Do your taxes need professional help?

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It’s tax season. Time to rummage through your file folders, desk drawers, and couch cushions for crumpled receiptsall the while wondering whether you can deduct your daily americano as a required work expense.

It can be a confusing, stressful time, for sure, but the rise in tax apps and online tools has offered a new light at the end of the tunnel. Just type in your info and you’ll see your return calculated instantly—no math, or paper cuts, required.

So now that everyone has a digital tax consultant in their back pocket, is it ever necessary to talk to an IRL human? We spoke with both an adamant tax DIY-er and a professional tax preparer to see if it’s worth your effort to put on socks and leave the house.  

The DIY-er

Charlie Lynn, 26

A Toronto-based artist and customer service agent at a tech company who’s done her own taxes since she was 18.

18 seems young to start doing your taxes. Were you just really keen?

My parents made me get the paper copy the first year that I did it. They said “you’re going to read through this really annoying document, and you’re going to fill it out, and then you’ll know how to do it forever and it’ll all be fine.” And it was.

Doing your taxes as a teenager is one thing. How about when you got older?

It’s definitely gotten more complicated over the years. Like, this year I have T4s from three different jobs, a T4E from being on unemployment, and I have self-employment income that I made working for artists. But I use an online program and it’s made it really easy.

Have you ever had to do any research outside of the program? Like, to keep up with changes in your lifestyle?

Not really, which was maybe a mistake. For tuition credits, I had no concept on how they worked until I got them. I’ve been out of school now for three years, and every year I’ve gotten every dollar of taxes I paid back because of my tuition credits. Learning that I can claim those, and that they’re there for me, was a bit of a welcome surprise.

How long does it take for you to organize everything?

The program I use generates all of the forms you have to fill in. So you just copy the information from your T4s and they figure it out for you. It probably takes around four or five hours.

Do you keep track of things throughout the year? Or tackle everything in March?

I don’t have a lot of stuff, really. Everything official comes in January or February, like when they’re sending out the T4s. And then for the self-employment, I just go through my bank accounts and figure how much I got paid for each job. And really, that’s about it.  

Sounds like you’ve got it together. Have there ever been moments where you wanted to consult a real person?

Where I’m at right now with taxes, I don’t have any real need for that. But I’m starting investing in RRSPs and TFSAs and Mutual Funds, and so I’ll have to actually deal with what that means. I probably won’t be able to do it on my own anymore, because calculating investment income is really different.

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The Pro

Zoe Klein, Owner at Zoe Klein & Company

A Toronto-based professional accountant and tax preparer for 33 years who focuses on individuals and small businesses.

Thanks for taking my call in the middle of tax season.

It’s been busy at the office, but it will actually pick up more around mid-month. I work with a lot people in the arts and entertainment field, and the stereotype is that they’re notoriously slow with money. So I’m expecting a flurry of phonecalls by the end of next week.

When would you suggest someone use your services?

If you run a business yourself, if you have rental properties, or if you have complicated investments. If you’re in one of those categories and you do your taxes on your own, you can’t possibly know all the ins and outs using online tools. Unless you’re a really exceptional person who wants to read up on tax news every year.

What’s the process like? Is it time-consuming?

In my office, we’ll do a one-hour consultation with new clients so we can ask each other questions and become comfortable with one another. If possible, I can complete the return for them during that appointment. Once I get to know someone, they can just mail me all their materials every year and I’ll put things together.

What about younger people? Is it ever worth it for them to use a professional to save time or money?

Students, or people who are working but paying off a student loan, sometimes those people would benefit from help. In the old days, our parents taught us how to do our tax returns, but you don’t see that as often anymore.

Younger people need to know which things carry over from one year to the next. If you’re a student, have you used up all your tuition tax credits? Do you know that you have to go online and download the tuition tax credit receipt from your educational institution? Are you better to keep the tuition for yourself, even if you don’t need it, or transfer it to a spouse or a parent? People can learn these things over time, but who would know that in university?

In my own practice, I’ll often do the returns of an existing client’s kids free or at a low cost, just to help them get going. That’s for people who just need a few lessons. I may even recommend they use an online software tool if I think they have enough information.

Seems like an odd thing for a tax professional to advocate for.

It seems like the antithesis of what a businessperson should say, right? So maybe I’m not the best person to interview. But I don’t want to take someone’s money if they don’t need my help.

What’s a common mistake or missed deduction you see DIY-ers making?

Most people are ignorant around their medical expenses. Especially in the early years, when your income is lower, you can benefit more from claiming them. You don’t get a huge deduction, but you should still save your receipts from dentists and prescriptions and doctors. If you’re working for a company and they’re giving you health benefits, you need to know if you’re paying for a portion. If it is, that portion is tax-deductible.

Any parting words of advice for tax time?

The single most important thing you can do in your financial life is file your return on time. Not filing can cost you a lot of money needlessly.

Verdict:

If you’ve got a somewhat standard work arrangement, minimal investments, and you don’t have kids yet, go ahead and entrust your T4’s to an app. Opt for the pro if your life gets a little more complicated.

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