Episode 84 – Accountant, H&R Block or Do It Yourself?

Why worry about taxes …

… when you can hire someone else to do that?

If this statement resonates with you, working with an accountant may be your best bet for filing your taxes.

But if your tax filing is uncomplicated and not causing you any grief, you may want to explore more affordable and accessible options.

Before you tackle your taxes this year, tune into the latest podcast episode to find out what method of filing is most suitable for you.

Show Notes:

Hey there. Welcome back to another episode. It’s that time—to talk a little bit about tax time. How do you file your taxes? Do you have an accountant? Do you go to H&R Block, or do you file your own, do it yourself on one of those softwares? Today I am going to talk about all of these and let you know what the best route might be for you. I’ll also share a few options and the price range on each. 

I think everybody should start out trying to do their own taxes using an easy program. When I say start out, I mean as a young person getting their first job, simple tax slips and no complications. That is the time to build up your finance skills and use a software program and sit down, try it yourself.

This is how you learn about what each slip is. What are the deductions in the numbered boxes and what do they mean? It’s making sense of it all. It really is building up that money muscle, and it’s giving you some information that you’ll take for the rest of your life. 

If you are a parent, friend, or family member of a young adult, help them out. Sit with them and go through the online program. I’ll give an example of a program like TurboTax, get them started so it’s not so intimidating later in life. Now I know that life is complicated and doing your own taxes is not for everyone, trust me. But it would build a knowledge base and be the cheapest route as a young person starting out. 

Okay, so I’m going to give you a few things. Do your own taxes on one of those softwares if you have a straightforward tax situation, very basic. You have the time and patience to deal with it. Expect to sit down the first time and spend a little bit of time learning the ropes. It gets easier after a few times when you use the same software. 

Most of that software out there is so intuitive and simple to use. So easy. Do your own taxes if you want to learn, and don’t mind the response. Okay, so top easy, do-it-yourself software out there: One is TurboTax that I had mentioned. The other one is H&R Block. I don’t mean the brick and mortar one that I’m gonna talk about later or right after this, but they have—H&R block has an online software, online program.

Another one is called You File, and if your taxes are really simple and you honestly just have one tax slip, meaning a t4, maybe you worked one job and that’s it, and that’s the only thing you need to file. Those programs will actually let you file for free. 

Otherwise, this is the cost: It is about $30 to $40 a person to file using one of their software. If it’s not the free one, pop in there. Give it a try. You can sign up, you can use the free one. You don’t even need to put in a credit card or anything to go in there and play around. So this is where I think everybody should start if you know that you have a very simple, straightforward situation.

Okay, so let’s talk about another option that’s popular, and that’s walking into H&R Block and sitting with someone to follow your taxes. That’s the brick and mortar building that H&R block has. I remember using this when we were first married and just had a baby. I think I was about 23 years old, maybe 24. I feel like my husband and I did it because we wanted a tax refund immediately and didn’t want to pay up. For the tax filing service, H&R Block took their service fee outta the refund, from what I can remember. So it means we didn’t have to upfront anything and we got instant money. That’s a huge win for a 24 year old who knows absolutely nothing, has a baby and not a lot of money. I’m not saying it’s the best situation. That is my memory of H&R Block, it was that first experience. 

I also remember that it was one of those OMG last minute moment of tax deadline scariness not knowing anything, but hearing from everyone and everybody saying that deadline, the tax deadline and freaking out and waiting in line and going to H&R block in person to file because apparently that’s what you’re supposed to do as a grownup I thought. So that was my experience. 

This route allows someone to guide you through the process. So you actually sit across from someone. Now that I have… I did go online to Google a little bit right before I hit record on this, and I think I saw the H&R block actually also offers online, not in person, but you can download your information on a secure site and then someone will do it virtually for you.

So there is that option. But if you walk in and you’re going to one of those brick and mortars, you’re gonna have a live person that has some experience, so you’re gonna be able to actually sit across from somebody, and sometimes that makes people feel better. The idea is that it’s quick and easy and you get a refund upfront.

That’s how I think the advertising for H&R Block and the enticement is that you get your money right up front. If you have a return, I mean like a refund on your taxes. But let me share a negative, that negative piece, and I know you’re already thinking about it, is the fees. There is a fee for the tax prep service, and then there’s another fee if you want your refund advanced now.

So the cost for in-person ranges between $80 to $195 for return. That’s not including the fee for an instant refund access. I wouldn’t use this method for a financial situation that has multiple revenue sources, investment income, or anything complicated. If it is complicated and it is those things I just said, revenue, extra revenues, investment income, then you’re gonna need a relationship with someone that is permanent and has more experience and will be able to provide advice throughout the year. That’ll give you a sense of what H&R block in person can do for you and the cost.

That leads me into the option of using an accountant. They are more expensive. But believe me, you get what you pay for. If you have multiple tax slips, investments, donations, self-employed, or you run a business, then you are going to want a relationship with an accountant.

Accountant software has the ability that your do-it-yourself software does not. It has extra sophistication for deduction options, additional filing forms, and tracking year over year comparisons, a trusted account. We’ll get to know your situation and be reliable over the course of the year as things come up.

They’re gonna be able to pull up info from CRA quickly for you. They’re gonna be able to call and find things out with CRA for you, and it’ll end up saving you time down the road and also save you from having to deal with the dreaded CRA, we want to keep them out of our life. Now, the cost for an accountant, this is kind of the kick is that it is between $300 to $600 a person, and that’s the starting price. 

As you get more sophisticated, and if you’ve got multiple revenues or you’re self-employed, or you have a business, it’s gonna cost much more than that. But remember, it’s well worth it. Once you start getting into that next level of complication, you’re going to want to hire an accountant. 

So I’m going to give you three things:

Hire a professional if you do not have the time or patience and you are willing to spend the money. Some things, time is precious. If you’re willing to spend that $300 to $600 a person for your accountant, it is money well spent to get this off your plate. 

Hire a professional if you have a complicated tax situation. Dependents, investments, assets, donations, business, you also hire a professional. 

If you have a major life change like a divorce, you’re selling a business, or you have the death of a spouse, that’s when you’re gonna want the guidance, especially if your mind is somewhere else and you’re dealing with other issues.

So out of all three of these this is my personal preference and this is—don’t don’t get mad at me—but I think that everybody should try doing their own taxes first if it’s simple. Go to TurboTax, use the online software. The younger you are, the better time to start out. You have the patience, the knowledge and just intuitively go through there. 

Then you can later in life make that decision to pay someone and find someone to do your taxes because you just don’t want to be bothered. But at least you have the foundation of learning over time what these slips are. 

So then the next route I said would be to find a professional at H&R Block. I think I feel like the energy around it is one that’s not prepping you up for success. It’s not giving you coaching. It’s a one-time hit, a one, one-hit wonder, and that’s great. You might need it at the time but really set yourself up for the long-term. 

Let’s think about the long game. Let’s get you up for success, and that is finding a relationship with an accountant. In the end, the method you choose is truly gonna depend on your complexity and the time you want to spend. 

That’s it. Don’t forget if you need, you can check our website astrafinancial.ca. I have the show notes there, or send me a note with any questions or comments. I’d love to hear from you. Until next time, I’m Zena.