The deadline for filing your taxes is April 30th which means that, if you’re like most Canadians, you’re currently collecting all your receipts and booking an appointment with your accountant or tax professional.
For many years, I too made an appointment every spring to hand over my taxes to someone else. But last year, I decided for the first time to do them myself. It turns out, filing my own taxes was much easier than I expected it would be. Also, by learning about the tax code, I was able to spot a mistake that my accountant had missed the year before.
Ultimately, what I discovered was that filing your own taxes is a pretty simple process, that almost anyone can do it, and that it can save you a lot of money.
Related Read: 6 Ways to save Money On Your Taxes>
Why I Do My Own Taxes
What made me decide to do my own taxes was the fact that my taxes had become so ‘complex,’ that for the last few years it had cost me over $200 to get someone else to do them. Because I have investment income and self-employed income, there were all sorts of deductions and expenses that I had to report. The first couple of years, I found this very confusing and appreciated having an accountant help me and answer my questions about what did and didn’t qualify for a deduction.
However, after a few years, I began to understand the tax code better and I had fewer questions. When I was filling my 2013 return, I sat with my accountant as she inputted the numbers and realized that I had actually done all the important and difficult work by adding up all my expenses by type in an Excel spreadsheet that I had provided to her.
Essentially, what I was paying her for at that point was data entry and to confirm that my understanding of the tax code was correct. It was then that I decided that the next year I would try to do my taxes myself.
Doing My Own Taxes
I must admit that I found the prospect of doing my own taxes intimidating. I pictured myself sitting in front of a paper tax form and trying to figure out what info went where. So, I decided to buy a computer program to help me, but when I went to the Canadian Revenue Agency (CRA) website to research which ones they recommended, I realized that there were free programs available (most of these free programs do recommend that you make a donation to support their work) that helped you file your taxes online. I decided to try one of those before I spent any money on a program. I’m glad that I did because it ended up being all that I needed.
The program that I used was called StudioTax, but there are a number of others that are available. StudioTax was well designed and took me through the process of filing my return. It gave me clear instructions to input information in different boxes. It wasn’t confusing or stressful and I was able to put the information into the program easily.
To keep my understanding of the tax code current, I read several websites that discussed important changes from the year before. Since I had also offered to do my partner’s taxes, I read about joint tax returns as well. That’s when I realized that my accountant had made a mistake by not filing our taxes jointly in 2013. I hadn’t realized that the Federal government considered us in a common law marriage because we had been living together for over a year and expected us to file together. A call to the CRA helped me smooth out how to fix the mistake and what impact it would have on the GST cheque my partner had received in 2014.
How To Do Your Own Taxes
If you’re considering doing your own taxes, the most important thing you should know is that it’s not as difficult as it seems. Most tax programs that you can buy or get for free are very straightforward and take you through the process in a way that makes it easy to follow along.
If you have a simple tax return, you will likely be done in five or 10 minutes. If your tax return is more complex, it could take you a little longer to input the data. For me, I spend most of my time finding my receipts and adding up my expenses, something that I had to do even when I was paying someone else to file my taxes.
If you have a complex tax return like me and you have a lot of questions about what can or can’t be deducted, you might consider getting an accountant to help you this year and asking them all your questions so that you will know what to do yourself next year. If you’re confused about something, you can also call CRA or look on their website.
If you are considering doing your own taxes for the first time, I would recommend that you do them early so that you won’t have to worry about long wait times if you have a question for CRA.