Why are you paying someone to do your taxes?

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I’m one of the weird kids. I can’t remember how old I was when I voluntarily chose to tackle my personal taxes on my own, but I was probably in my late teens or early 20s. My dad was, and still is, the one that completes tax returns for my mother and my sister, and maybe even some of his siblings. Why the heck would a young person want to file their own taxes? That’s part of my feisty personality – I like doing (or at least trying) to do things on my own. 

Filing taxes is not something a normal person looks forward to. For a first-timer, it can seem daunting. The print on the back of your tax slips are small, and the prints fills the entire small piece of paper! I’ve also been on the other end, spending my first university work term at Revenue Canada in their tax department, during tax season! That is the only job where I was yelled at on the phone by angry people. People yell as if I personally am trying to collect their money. They yell because they live on food stamps. They yell because of the moratorium, which has put them out of a specific job, and they don’t want to be retrained to do something else (other than fishing) for a living. They yell because they finally get caught and owe a boat-load of money for back taxes. Tax season is no fun for the filer or the processors. 

Thinking back to when I first started out, it was confusing. A package comes in the mail from the CRA with pre-addressed labels, the forms (thankfully they provide two sets), and the guidebook. It always starts the same way – organize your tax slips by type. Start at the beginning of the return and make your way down line-by-line. Skip over to another section as per the instructions. Stop, flip through the guide for clarification, continue. Next to me would be my calculator, scrap paper, and eraser. When I was done, I’d give it to my dad to look over. When it got his approval, I’d set up my typewriter and complete the clean forms. I don’t remember if we had a printer/copier/scanner back then, so I can’t remember how I would keep a copy of the final return. The whole process was long and slow. Completing my first draft took hours.

I started investing on my own in my early 20s, when I was in second year of university. I had read The Wealthy Barber and was inspired. I walked into my bank and said that I wanted to buy a mutual fund (it sounds comical now). I didn’t have much money when I was a student, yet I was still determined to make my measly money work for me. I set up an automatic monthly purchase plan, which allowed me to automatically invest $25 each month. Investing is a good thing, but it (hopefully) generates income that is (mostly) taxable. And when you sell investments, it can generate capital gains (or losses). All of this forced me to flip through the tax guide when it was filing time. Eventually, I moved from pencil, paper and calculator to an Excel spreadsheet to calculate my ACB (adjusted cost base). Thankfully I learned the basics of Excel in my business and statistics courses in university. Over time, the typewritten final return turned into neatly hand-written returns, and maybe even not so neatly hand-written. And I eventually stopped burdening my father with double-checking my returns once I had a few under my belt. He already had at least three returns to complete.

As I became more accustomed to filing taxes, I pushed completing it later and later, simply because it’s a pain to do and I can always find something better (more interesting) to do. Things changed a little the first year I became self-employed. There were so many new things to look into! I was now expected to file a business return, which required new calculations that I’ve never done before. It was overwhelming, and didn’t help that I left it until the last minute. I took a stab at it before I threw the towel in and found myself sitting at an H&R Block set up in The Bay (department store). What a joke to pay $400 for them to complete my return. I call it a joke because I caught a mistake the lady made, only because I had attempted the return on my own first. Good think I could charge that as a business expense! Needless to say, I went back to doing my own taxes from that point on. At least I now had a “template” to follow.

Voluntarily, self-employment didn’t last too long as I switched careers yet again. By this time, tax forms were available as fillable PDF forms, which you could print and mail in. No more hand-written or typewritten returns required, but I was still paying the postage for mailing in the over-sized envelope. The process of filling out the forms was still a pain because I still had to go through each slip to pull the numbers, and the fillable forms were not formula-driven. I still had to use a calculator. My spreadsheets morphed too, so that I could automatically calculate totals for different lines in the return from numbers on the same tax slips. The fillable forms also did not link to related forms. I still had to know which forms I needed to download and complete. Don’t ask me why I didn’t use tax software. Call me old school.

Last year, I finally made the leap to online filing. Yes, I skipped right over tax software to help calculate balances, straight to filing straight away. I think online filing has been around since 2001, but it wasn’t so easy or straightforward right out of the gate. That’s a partial excuse for why I’m so incredibly late to the game. It’s also because I’m old school, but I said that already. I can’t speak to how far the technology has come since the early days of online filing, but I will admit that it was super stinkin’ easy. I started out the same way I’ve always done it – grouping my tax slips. All I had to do was enter the numbers into the software and it did all the calculations. Magical. Tax completion time was so fast and I didn’t even need a calculator or spreadsheet! Why in the heck would an individual with no complicated investments pay someone to do their taxes when you can just transfer the numbers from your slips into the online forms? And then hit submit and it’s sent to the CRA for processing (or you could print out the forms and mail them in if you want to). No more runs to the post office! The caveat is that you have to sign up for a CRA online account in order to submit your taxes online. This does take a little pre-planning, meaning don’t leave your taxes until the day before it’s due if you want to file online without a CRA account. To open the account, you start online; however, part two requires (at least back in 2014 when I did this) CRA to mail you information to complete the setup.

I was clearly not as annoyed with filing my taxes last year. This morning I woke up and decided that maybe I should do my taxes. Damn good thing I decided to do this, since it is due in TWO DAYS! Of course I had trouble logging into my CRA account because I’m an idiot, but I got that resolved, pronto. Hubby was making fun of me before I even started. He was the one that re-informed me that it was due soon. *Meh.* I organized my tax slips, took the last sip of my coffee, and was ready to spend at least 40 minutes on this chore. Much to my delight, more improvements have been made to online filing! In large lettering, I was given the option to pull the information on the slips from my CRA account. Hell ya! Don’t worry, you are still required to check the numbers by slip before the system accepts it. I spent maybe 20 minutes in total completing my tax return. And there were no papers surrounding me on the floor.

The point of this is that completing individual tax returns isn’t as time consuming as it used to be. There’s really no excuse not to do it yourself, or at least give it a try. If you have basic investments and standard income (you get a T4), the whole processes takes 15-30 minutes to file online. Or maybe I’m the one that’s behind, and maybe the majority of simple returns are already being completed online. 

In comparison to how it used to be, I have no complaints about filing taxes anymore. The logical next step would be to have the CRA file my taxes for me, since they pretty much already have all the information in their system. Is this what it’s like to get older? We’d be able to say to the younger generation…”back in my day, paper slips in duplicate were mailed to us and we had to detach one copy and staple it to our tax return; something all Canadians had to complete once a year…” 

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