Preparation of a tax return most frequently appears to be deceptively simple. However, once a taxpayer embarks on what appears to be a 'piece of cake' can easily turn out to be a very confusing and daunting task.
The cost of involving a professional tax preparer or better yet a designated accountant is, as acknowledged by most clients, is easily outweighed by the benefits of using those services in terms of tax savings as well as avoidance of trouble with CRA or IRS.
Albert Einstein once said: “The hardest thing in the world to understand is the income tax.”
Over the years, taxation laws, rules, regulations, and interpretations by CRA or IRS have become so complex that most of time even an apparently simple tax return preparation can turn into an exercise in solving a punishing puzzle.
Tax software can easily turn from 'friend' to 'foe'. The smartest thing, most of your freinds will vouch, is to engage a professional accountant and save yourself the trouble of receiving half a dozen reassessments, questions, scrutiny and intimidating phone calls and visits for a tax auditor.
Tax filings include:
T1 (Canada) or in USA: Form 1040. For both employed as well as self-employed individuals.
- Partnerships and LLC in USA: (Form 1065 and State LLC forms)
- Corporations T2 (Form 1120 and 1120 S - S corps)
- Trusts: T3 in Canada and Form 1041 in USA.
- Tax exempt organizations: T1030 in Canada and Form 1041 in USA.