Filing your taxes is an extremely stressful and mysterious process for most Canadian taxpayers. You have to gather up stray faded receipts, ensure you have all of your various tax slips on-hand, and then attempt to sum up every relevant expense from the last 12 months of your life.
While filing your taxes can be a daunting task, it doesn’t necessarily have to be that way; there are a number of free software options that allow you to easily file your taxes on your own, and depending on your tax needs and your budget, hiring someone to do your taxes might be a worthwhile option.
“Should I do my own tax return or hire someone to do my taxes?” Below we’ll explain how to prepare and file your taxes in Canada, when it makes sense to tackle your taxes on your own, and when your best bet may be to hire an expert to prepare and file your taxes for you.
How To Prepare And File Your Taxes in Canada
If you want to save yourself some headaches come tax season, a good rule of thumb is to start organizing your tax documents as soon as you receive them. By mid-February or early March you should have all of the necessary documents you need to get started on filing your tax return. These include, but are not limited to the below (Quebec has their own tax slips in addition to the below Federal slips):
T-4 slips: You will receive a T-4 slip (Statement of Remuneration Paid) from every employer you worked for throughout the year. Your T-4 slip will include your full payment for the year and detail all of the deductions from your pay. Freelance workers will receive a T-4A slip instead (see more on that below).
T-4A slips: You will receive a Statement of Pension, Retirement, Annuity and Other Income slip if you are on a pension, retirement, annuity (insurance payments), or if you are self-employed or did any freelance work during the year.
T4E slips: If you were on unemployment or received CERB (Canada Emergency Response Benefit) payments at any point in the year, those payments will be calculated on a T4E slip. Note that unlike unemployment benefits, you will need to pay taxes on all CERB funds, so be sure to put some money aside throughout the year to cover your bill.
T2202: If you were a student during the year, you can claim a percentage of your tuition fees and schoolbook expenses on the T2202 Tuition Enrolment Certificate slip.
T5 slip: If you received any investment income throughout the year, those amounts need to be detailed on a T5 slip.
Expense receipts: You will need original copies of the receipts for all expenses you are claiming on your taxes, including medical bills, charitable donations, day-care costs, home office expenses (if applicable), and anything else you are looking to claim on your tax filing.
You will also need to have all of your personal information handy in order to proceed with your tax return, including your Notice of Assessment from the prior year, your Social Insurance Number and mailing address, as well as the government access code provided by the Canada Revenue Agency (CRA) or the Agence du Revenu du Québec (ARQ).
Once you have all of your tax documents in-hand, you will need to decide if you want to file your taxes on your own, or hire a professional to do your taxes for you. There are a number of factors to consider for each course of action; we’ve broken them down for you below to help you make an informed decision on what makes the most sense for your situation.
When To Hire Someone To Do Your Taxes
You may want to hire someone to do your taxes if you have a more complicated tax filing. This can include everything from multiple jobs / sources of income, numerous sources of freelance / self-employed work, many deductions and expense claims, a series of investments, and more.
While you always have the option of doing your taxes on your own via the DIY route, hiring a professional to do your taxes has a number of benefits. Those benefits include their ability to advise you on possible deductions and claims to save you money, as well as the security in knowing that they are much less likely to make mistakes in your filing.
When to Do Your Taxes Yourself
If you have a relatively simple tax situation, you can save some time and money and file your taxes yourself. If you’ve had the same job throughout the taxation year and don’t have a number of investments, you should be able to easily file your taxes on your own.
Each variable you add to your tax situation (investments, additional jobs and expenses) makes filing your taxes on your own more complicated, and may result in costly errors if you’re not aware of all the tax filing limits and regulations. However, if you only have a handful of tax documents from one or two employers (or you’ve kept meticulous records as a self-employed worker), you might want to try the do-it-yourself approach.
There are a number of free online options that allow you to prepare and submit your Canadian taxes free of charge, including software from Wealthsimple Tax, Credit Karma Tax (now known as Cash App Taxes), TurboTax, and H&R Block. If you have more tax variables or need some additional resources or support, all of the above companies also offer paid upgrades to help you do more complicated tax returns on your own without the expense of hiring a tax expert.
The Cost For Someone To Do Your Taxes In Canada
So how much does it cost to have someone do your taxes? The cost of hiring someone to do your taxes in Canada will vary based on the complexity of your tax return and the experience of the person or company you are hiring for the job. You may be able to find someone to prepare your taxes for as low as $50-$75; these might be individuals with a deep knowledge of the tax system who are looking to make some extra money during tax season, but you should do your due diligence to be sure they are experienced with preparing and submitting taxes.
If you have a more involved tax return including investments, expenses, and a number of deductions, you want to be sure you are hiring an expert to do the job. One important note to keep in mind is that when signing over an individual or company to prepare your taxes for you, is that you are liable for any mistakes (even accidental) that might occur in the filing. With that in mind, you always want to be sure you are in good hands. One way to alleviate that stress is to hire a specialized tax preparation expert, an accountant, or a bookkeeper to file your taxes.
Hiring an expert will cost more (anywhere from $100 – $500+ depending on your tax situation and the work involved) but might actually save you money. A tax expert will be fully aware of all the potential deductions appropriate to your situation, and will understand the type (and amount) of expenses you can claim, which may increase your tax return. While hiring an expert to do your taxes is more costly, their expertise and experience may get you a better return, and will alleviate any tax stress by knowing you’re in experienced hands.
Anyone you’re hiring to do your taxes will be able to get you a quote of what the preparation will cost; they’ll ask detailed questions about your tax situation which will provide an idea of the complexity of your case and the amount of work required. If it’s your first time paying someone to do your taxes, feel free to shop around to get the best price or the preparation expert you feel the most comfortable with. Just don’t wait too long; many of the best preparation experts will be booked up fast as Canadian tax season approaches, so start reaching out by early January to be safe.
Where To Get Your Taxes Done In Canada
If you are looking to hire a professional to do your taxes, you have a number of options depending on your location and your particular tax situation.
H&R Block and Liberty Tax have physical tax offices all throughout Canada, which will allow you to physically drop off your tax documents and meet with an advisor to gather the information needed to file your tax return for you. While the cost will vary according to a number of criteria, you can always call ahead or look online for an idea of what the total cost of your return should be.
In addition to the major tax companies, you can always elect to hire a private tax specialist, bookkeeper, or an accountant to prepare and file your taxes for you. Prices will vary based on their experience and the complexity of your return, but proceed with caution; your best bet is to get a recommendation from a friend, family member or co-worker to ensure that you are in good hands.
If you earn a modest salary and have a fairly simple tax return, you may be eligible for a free Canadian tax clinic (consult the CRA or Quebec Revenue websites to determine your eligibility). If you are eligible, you can elect for an in-person tax clinic or a virtual session; these sessions are generally held in community centres across the country, and are a great way for lower-income individuals to get expert help with filing their taxes free of charge.
How to Do Your Own Taxes
Doing your taxes on your own is easier than ever thanks to intuitive software that allows you to file your taxes online. If you have all of your documents in order and your return is fairly basic, doing your taxes on your own should be relatively straight-forward.
By physical mail:
Some people feel more secure sending in their tax return by physical mail; while there is something reassuring about placing your tax return in a sturdy envelope and sending it off by mail, you can expect a much longer delay in the processing of your return if you go the old-school route.
Filing online via tax preparation software:
This is far and away the preferred and most common way to file your taxes. Using any one of a variety of CRA-approved software to file your taxes online is the easiest and clearest way to do your taxes on your own. The software will prompt you with questions to help you narrow down your individual needs and potential deductions, making it clear how much you owe (or if you’re lucky, what you can expect as a return).
Once you have completed the process, you can then upload your completed tax return to the CRA (and Revenue Quebec, if applicable) using the access codes you received from the government by mail earlier in the year.
Ready to do your taxes on your own? Below you’ll find a breakdown of four of the most-popular tax preparation software options on the market. Each of the below options is CRA-certified with a free option for simpler returns and a paid upgrade for more complicated returns.
Tax Preparation Software
Previously known as Simpletax, Wealthsimple Tax is a component of the popular Wealthsimple. A benefit of using Wealthsimple Tax is the ability to manage and track your investments, trades, and tax returns all through one application.
In business for over 50 years, H&R Block now also offers an online tax filing system free of charge (with a paid upgrade) in addition to all of their physical locations throughout Canada.
The most popular tax filing software in Canada, Turbo Tax is a reliable and easy-to-use tool to file your taxes. The service is completely free if you use the company’s online Turbo Tax Free service.
Our Final Thoughts
Deciding whether to try filing your taxes on your own or enlisting the services of a professional is a decision all Canadian taxpayers have to make each year. If you have a straight-forward tax return without any complicated deductions or expense claims, you should be fine using the do-it-yourself approach. Tax filing software makes the process as easy as can be, and you will have your return processed quickly free of charge or for a small fee if you choose to upgrade to a paid tier.
However, if your tax situation has a number of components (including multiple jobs, investments, and numerous deductions and claims), you may actually save money by hiring a tax professional to prepare and file your taxes for you. A tax professional will know about potential deductions and other cost-saving measures that you might not discover on your own, which makes hiring a professional a sound investment.
Whichever method you choose, remember that you are ultimately responsible for your filing, even if you employ someone else to do the work for you; due your due diligence, and you should be in good hands come next tax season.
Frequently Asked Questions
You are required to file your Canadian taxes by April 30 each year. The Canadian tax period runs from January 1 – December 31; you have until April 30 of the next year to file your taxes without any penalties. You can pay your taxes after April 30 but there will be penalties and interest charged depending on the amount you owe (alternately, a cut of what you government owes you can be deducted as a penalty for your late filing).
If you have all of your tax documents in-hand much sooner than April 30, you can file your taxes beginning as early as February.
While it has become easier than ever to file your taxes on your own, if you have a more complicated tax return (including multiple jobs, investments, and numerous expenses and deductions) than it might be beneficial to hire an account to do your taxes. While hiring an accountant is much more expensive than doing your taxes on your own, their expertise may actually save you money, given their extensive knowledge of potential deductions and other recommendations that may lower your final tax bill.
If you are short on funds or simply have a relatively straight-forward tax return, there are a number of options available to file your Canadian taxes free of charge.
Turbo Tax, Wealthsimple Tax and H&R Block all offer the ability to file your taxes online for free. All of these services allow you to file your taxes using their online software free of charge for basic tax returns, and also offer paid upgrades which unlock additional features and resources for more complicated tax returns.