Don’t Pay Too Much to your Tax Preparer
In a few short days, it will be February. The gloom will start to lift, the sun will shine more, birds will be seen more often, and T4s will begin to arrive (cue ominous music).
For many people, tax time means racing through receipts, fumbling with paperwork, and getting “tax pain” (a lovely advertising gimmick coined by a large, national tax preparer…essentially “tax pain” equals “Pain in the a$$”.
However, filing your taxes doesn’t have to be a horrific and painful experience akin to being the “fresh meat” on cell block T. There are a number of different options available. You can
1. File using paper…..”old school” but provides a sense of nostalgia (and supports many of BCs pulp and paper workers)
2. File online using a computer service…. Do-It-Yourselfers can use services such as UFile to file online for as little as $15.95. (www.drtax.ca if you’re interested or www.turbotax.intuit.ca for $17.99 both are good )
3. Purchase a program from a local office supply/computer store…. TurboTax seems to be the market leader and is $19.99 in stores (and includes 8 returns!)
4. Hire a tax preparer …price ranges from $free to $100s depending upon complexity … (and, this is the main reason for my article)
So, why would I write an article explaining how people can save money by doing their taxes themselves? Or suggesting that people shop around if they choose to use a tax preparing service? Well, in a nutshell, it’s because I believe in a win-win and like to help people.
A win for me does not have to be monetary in nature. I’ve seen students who have had their tax returns done by “national tax preparing services” (don’t want to use their names) and being charged $50, $60, or even more. To me, this is ludicrous. A student shouldn’t have to spend a weeks worth of food to get their income taxes prepared. Other people with a couple of T4 slips often pay close to $100 for their returns. Ouch.
So, here’s the low-down (from a tax preparer…ie me). It takes approximately 10 minutes to prepare a basic tax return. The software that a company chooses to process the returns will cost about $2.00 per return. Then, there are the paper costs and overhead costs. So, ask the preparer what their hourly rate is. Then divide that by 5. That should be what you pay for the return. (of course, there are many other things that come into play with tax returns…..business reports, estates, etc….and these all require special circumstances and consideration)
Now, my plug. I do most student tax returns for between $0 and $10. I’m a college instructor at a local community college, and I know how strapped my students are for cash. $10 covers a bit of my time and paper costs. If a person is low-income, I usually charge them between $0 and $20. This includes copies for their records, Efiling, etc. Other returns start at about $35 and increase in cost depending upon complexity.
So, make a phone call…do some research….it could save you a few bucks.