DIY vs Accountant: Decision Guide
| Tax Situation | DIY (Software) | Professional Accountant |
|---|---|---|
| Single T4 income, basic return | Best option ($0–$30) | Overkill ($100–$200) |
| T4 income + RRSP + basic credits | Best option ($0–$30) | Not needed unless complex |
| Self-employed (sole proprietor) | Possible but risky | Recommended ($200–$500) |
| Rental property income | Possible with good records | Recommended ($300–$600) |
| Incorporated business (T2 return) | Not recommended | Required ($500–$2,000) |
| Foreign income or investments | Challenging DIY | Recommended ($300–$800) |
| CRA audit or reassessment | Not recommended | Strongly recommended ($500–$2,000+) |
| Major life event (divorce, inheritance) | Risky DIY | Recommended ($300–$800) |
| Multiple provincial returns | Possible but complex | Recommended ($200–$500) |
Cost Comparison
| Filing Method | Cost | Best For | Accuracy |
|---|---|---|---|
| Wealthsimple Tax | Free (pay-what-you-want) | Simple to moderate returns | High (NETFILE-certified) |
| TurboTax Free | $0 (basic) / $40–$60 (advanced) | Simple returns | High |
| CloudTax | Free (basic) / $30 (premium) | Simple to moderate | High |
| H&R Block (in person) | $75–$200 | People who want help but have simple returns | Moderate (depends on preparer) |
| Liberty Tax | $80–$200 | Similar to H&R Block | Moderate |
| Independent CPA | $150–$800+ | Complex returns, planning advice | High |
| Tax lawyer | $300–$500/hr | CRA disputes, complex planning | Highest |
When DIY Tax Software Is Enough
| Situation | Example | Reason |
|---|---|---|
| Single source of employment income | One T4 | Software handles this perfectly |
| Basic RRSP/TFSA contributions | Standard contributions | Auto-fills from CRA My Account |
| Charitable donations | Standard donation receipts | Software calculates optimal claiming |
| Medical expenses | Receipts for eligible expenses | Software knows the threshold |
| Student with tuition | T2202 slip | Auto-populated |
| Child care expenses | Receipts for daycare/camp | Software applies correct limits |
| Simple investment income | T5 slips from bank/brokerage | Auto-imported |
When to Hire a Professional
| Trigger | Why | Potential Savings |
|---|---|---|
| First year self-employed | Proper setup, HST/GST, expense tracking | $1,000–$10,000+ |
| Rental property income | Depreciation (CCA), expense claiming, capital gains | $500–$5,000+ |
| Incorporating a business | Corporate tax planning, salary vs dividends, year-end | $2,000–$20,000+ |
| Major capital gain | Principal residence exemption, capital gains reserve | $1,000–$50,000+ |
| Receiving an inheritance | Estate planning, tax implications | $1,000–$20,000+ |
| Moving to/from Canada | Departure tax, worldwide income reporting | $2,000–$10,000+ |
| CRA review or audit | Representation and response | $500–$5,000+ avoided penalties |
| Divorce/separation | Asset division, support payment tax treatment | $1,000–$10,000+ |
| Year of death filing | Final return + rights/things return + estate return | $1,000–$10,000+ |
What to Look For in a Tax Professional
| Credential | What It Means |
|---|---|
| CPA (Chartered Professional Accountant) | Highest qualification; best for complex situations |
| Tax preparer (non-CPA) | Adequate for simple returns; lower fees |
| H&R Block / Liberty Tax | Seasonal preparers; quality varies by location |
| Tax lawyer | Needed for CRA disputes, tax court, complex planning |
| Checklist Before Hiring | Why |
|---|---|
| Check for CPA designation | Verified expertise and accountability |
| Ask about their experience with your situation | Not all CPAs specialize in your tax type |
| Get a fee estimate upfront | Avoid surprises; percentage-of-refund models are a red flag |
| Ask how they stay updated | Tax laws change annually |
| Verify E&O insurance | Errors and omissions insurance protects you |
| Confirm they file electronically | Faster processing and refunds |