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How much should I pay for Tax Preparation?

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Alex, Staff Writer

Friday, 25 June 2021

Preparing your taxes is not the most exciting thing in the world. That being said, it has to be done. 

Preparing your tax return can be a complicated task, especially for those who struggle with numbers. It is no surprise, then, to find out that over half of Canadians hire professional help to carry out their tax preparation

So with so many of us outsourcing this responsibility onto some far more qualified, how much should we be paying for tax preparation and are we paying too much? 

To answer this question, we really need to understand what we’re actually paying for and how this price structure breaks down. All this adds a little more headache to the whole process; our bank balances will thank us later!

First Up: Understand your own circumstances

Not everyone’s tax preparation will be exactly the same; some can be very simple and straightforward whereas others can be very complex. By understanding your own circumstances and situations, you can better assess how much you should be paying and if you’re paying far too much.

If it’s simply a case of filling out your T4 without a whole list of deductions, then you don’t want to pay over the odds. However, if you need in-depth tax preparation that includes things such as income from rental properties or has estate issues then you will need to pay for more detailed tax preparation.

Keep this in mind when you are searching for a professional tax preparer; you’re already paying your taxes, you don’t want to pay over the odds. By using Bark, you can find well-established professional tax preparers, all in your local area.  

Secondly: Know what you want from your tax preparer

With so many different tax preparers out there, it’s important to understand what each one of them offers. Simply paying a straight-up fee for someone to fill out your tax preparation is all well and good, but what about some actual advanced tax planning advice?

Given the right information, there are many out there that would be able to fill out the correct forms and procedures, but not everyone can help you save on future tax.

So, paying that little extra can go a long way to helping you and your tax needs further down to the line. On the flip side, no one wants to be paying far too much when all they are getting is the basic service - bear this in mind.

Lastly: Compare services against prices

Similar to what we were saying above, it is important to cross-reference the price you are paying for the service you are receiving. Some tax preparation services have set prices, while others, such as professional accountants, can cost up to thousands of dollars.

Other services that are worth paying are what are known as follow-up services. This means if your tax return is audited and even investigated by the Canada Revenue Agency, you have already paid your tax preparer to be there and help you through these processes. 

If you have simply paid for a limited-service or done it yourself, you could find yourself trying to surge the case against the CRA alone - a scary thought!

To sum up

In conclusion, the answer to ‘how much should I pay for tax preparation?’ is not a simple one. This will all depend on the level of service you need, how complicated your overall tax return is, and if you require after-care services in case the Canada Revenue Agency comes knocking. It is best to balance up all these points and ask yourself if you are preparing to pay for what you are going to receive.

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