Do-it-yourself can be fun when exploring new hobbies, but when it comes to your taxes, it can put you at risk — especially if you don’t know what you’re doing.
Gerry Vittoratos, the national tax specialist at UFile Canada, said if you’ve got a basic return, you should be OK to file your taxes yourself.
If you’ve got employment income from a company you work for, maybe some medical expenses, some RRSP/TFSA contributions, some charitable donations, perhaps child care thrown in, Vittoratos said you have a fairly simple job ahead of you to submit your own taxes and probably don’t need to get an accountant.
When should I call an accountant?
If you have a more complex situation, such as being self-employed, working from home, having capital gains transactions or short-term rental income, you could be better off calling in a pro.
But Vittoratos encourages anyone with doubts to seek help.
“If you feel overwhelmed, just go to an accountant, don’t even bother,” he said. “Capital gains, self-employed employment expenses, working from home, things like that — that’s when it starts getting more complex.You’re better off with an accountant.”
Accountants can help you figure out what is best for you when it comes to filing your taxes, including strategies the average person might not know that work for your specific situation.
Tax filing programs people can use at home are perfectly capable of doing more complex taxes, but Vittoratos says the person doing the filing needs to be knowledgeable about tax laws and rules to do it correctly and effectively.
“Software like UFile can do them. It’s not a question,” he said. “It’s just that you need to know what to feed the programs so that it properly calculates. And if you don’t know, then it becomes a lot harder.”
Vittoratos said for people who have short-term rental income, it could be important to see an accountant, as the tax rules have changed for these people.
“It gets very complex,” he said. “Don’t try, go to a professional.”
Changes to the income tax rules in Canada . If you rented out a residential property for short periods, these changes could impact you.
What if I don’t file my taxes correctly?
If you don’t file your taxes correctly, it’s possible you could be audited.
“What can happen is usually reassessments, which basically the government is going to disagree with the result that you send them,” said Vittoratos. “The government then will check your return and say, ‘OK, I agree. Here’s your cheque’ or ‘I disagree, pay me.’”
Vittoratos said the risk of reassessment — especially if you have short-term rental income this year — is why hiring an accountant can be worth the money.
“You might think, oh, they (accountants) are expensive,” he said. “But it’s very expensive on your time to try to untangle the mistakes you make on your return that the government is trying to collect from.”
The Canada Revenue Agency says they .
The assessment looks at a number of factors, including the likelihood or frequency of errors in tax returns or whether there are indications of non-compliance with tax obligations.
CRA tax deadlines
April 30 is the deadline for most people to file their tax return and pay any taxes owed.
June 15 is the deadline to file your tax return if you, or your spouse or common-law partner, are self-employed. The Canada Revenue Agency advises that since the date falls on a Sunday, it will consider tax returns filed on time if received on or before June 16. If you owe money, you will still need to pay by April 30 to avoid interest.
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