Choosing between tax software and an accountant depends on how complex your financial situation is, how much you want to spend, and your personal preferences. Tax software is good for simple tax situations but an accountant is better when things are more complicated.
Tax software is easy to use, doesn't cost much, and provides many helpful tips. For people with simple financial situations and only one job, using tax software can save time and money.
Accountants know a lot about tax rules and can give you personalized advice. They can help you save a lot of money on taxes and give you tips on how to manage your money better. Accountants are especially useful for people who have tricky financial situations or are going through big changes in their lives.
Let’s take a look at the positives and negatives of each option to help you make the choice that’s best for you.
Key Takeaways
- Tax software costs between $0 and $150 and hiring an accountant can be anywhere from $150 to $400, depending on your financial situation.
- Use tax software if your taxes are straightforward, you know the basics, and you have time.
- Use an accountant when your finances are complicated or have changed, you don’t have time, and you want expert help and peace of mind.
Overview: Tax software vs. an accountant
Deciding how to tackle your taxes each year can be a big decision – should you go the DIY route with tax software, or is it worth bringing in a professional accountant? Both options have their advantages and disadvantages depending on your financial situation, your comfort level with numbers, and the complexity of your taxes.
Let’s take a closer look:
| Method | Best for… | Cost | Pros | Cons |
|---|---|---|---|---|
| Tax software | * Simple taxes | $0 to $150 | * Less expensive * Can do it on your own schedule * User-friendly * Quick refunds | * Lack of personal advice * Less support if audited * Upfront payment needed * Learning curve required |
| Accountant | * Small business owners * People with many properties and investments * People with multiple income streams | $150 to $400+ | * Expert guidance * Know all of the credits you may not be aware of * Support if you’re audited * Peace of mind | * More expensive than the software * Longer process |
While tax software offers an affordable, convenient solution for straightforward tax situations, the expertise of an accountant is valuable for complex financial scenarios.
When to use a tax software
Tax software can be a great help if:
- Your taxes are simple: This means you don't have many different forms of income or deductions. For example, you might just have income from one job and not much else to report.
- You're on a budget: Tax software is usually cheaper than hiring an accountant. If saving money is important to you, this could be a good way to go.
- You like doing things yourself: Some people enjoy learning and doing their taxes on their own. Tax software can guide you through the process, making it easier.
- You have some tax knowledge: If you understand the basics of taxes, tax software can be a straightforward tool to use.
Using tax software is like having a guide that walks you through each step of doing your taxes. It's designed to make things easier and faster – especially if your tax situation isn't too complicated.
Remember, the goal is to make sure you can file your taxes correctly without feeling overwhelmed. If this sounds like your situation, then tax software could be the perfect fit for you.
Check out some of the top-rated tax software below:
Wealthsimple Tax (formerly SimpleTax) is free Canadian tax software that aims to make filing your taxes easy. There’s no downloading necessary – you can go through the process right in your internet browser with step-by-step instructions and auto-fill features. And with maximum refund and accuracy guarantees in place – it’s worth giving it a shot. You’ll even be able to transfer prior year data, an option only available on a handful of other tax software.
- It's free to use
- 100% accuracy guarantee
- Support for all provinces – even Quebec
- Covers simple tax situations, plus some complex ones
- Ability to import prior year data
- Support is through email only
- There is no app
- Limit of 20 returns per account
- Canadian citizen
- Maximum refund guarantee
- RRSP calculator
- Auto-fill available
- Always
As one of the most recognized names in the tax industry, H&R Block provides one of the best tax software products in Canada on top of its in-branch services. With accuracy guarantees, one-on-one attention available from tax professionals at physical offices or online, and options for each price bracket (including free!), H&R Block seems to have thought of everything.
- Well-established and trusted industry name
- In-person, online, and drop-off filing options
- Clear, step-by-step instructions
- Ability to save your progress and return later.
- Access to seasoned tax professionals
- Free and paid services available
- Specific package designed for self-employed individuals
- Limited free support
- Free version is quite basic
- File online or in-person
- Accuracy guarantee
- Self-employed tax package
TurboTax is one of Canada’s most popular tax preparation apps. It’s been around for years, is backed with some solid guarantees, is simple to use, and really takes a lot of the pain out of doing your taxes.
- Import options
- Real-time refund / owed amount
- Easy online filing
- Instant confirmation, fast refunds
- 4 guarantees to help you feel secure
- Good security practices
- Standard $20.99 price tag
- Canadian citizen
- Maximum refund guarantee
- Auto-fill available
- Promo: Get up to 20% off your TurboTax purchase
- Have a simple return
- Comes with limited features
When to use an accountant
Consider hiring an accountant if:
- You have complicated taxes: This could mean you own a business, have multiple jobs, or earn money from investments. An accountant can handle these complex details.
- You don't have time or don't want to do it yourself: If the thought of doing your taxes feels overwhelming or you're too busy, an accountant can take care of everything for you.
- You've had big life changes: Bought a house? Got married? Started a business? Big transitions like these can make your taxes more complicated. An accountant can guide you through these changes.
- You want to save more money: Accountants can help you find deductions and credits you might not know about, so you might save money on your taxes over using tax software.
Hiring an accountant means you get a tax expert who looks at your whole financial picture. They don't just fill out forms – they offer advice and strategies to lower your taxes now and in the future.
If your taxes are more than just a simple form, or if you want the peace of mind of knowing a professional is looking out for your best interests, then finding a good accountant could be the best decision for your finances.
FAQ
Is it worth paying someone to do your taxes?
Paying someone to do your taxes can be worth it if your tax situation is complex, you value expert advice, and you want to ensure accuracy and maximize deductions. It's especially beneficial for saving time and reducing stress during tax season.
Can a tax preparer get me more money?
A skilled tax preparer can potentially get you more money by identifying deductions and credits you might miss on your own, ensuring you fully capitalize on tax-saving opportunities tailored to your financial situation.
How much does it cost to hire someone to do your taxes?
The cost of hiring someone to do your taxes is very dependent on the complexity of your situation. That said, the average cost to hire an accountant is between $150 and $400 for individuals and could be more for corporate taxes.
Do I need an accountant if I use accounting software?
You’ll typically only need an accountant or accounting software – not both. But if you have any questions about the return you prepared with accounting software, by all means, consult a tax professional.
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