Do I need a CPA/CA to prepare my taxes?

February 17, 2013 1:25 PM

I moved back to Canada in November 2012 after living in the US for the past five years. Last year I had a CPA prepare my 2011 US and Canada returns and was shocked when I was billed $2,200 for what I see as a relatively simple tax situation. (W2, 1099-INT from the bank, statements of 401K and RRSP contributions and charitable donations) I still haven't recovered from paying so much last year and well, it's that time of year again. What are my options of having my US and Canadian returns prepared for a more reasonable amount? Can I get a US tax preparer in the States and a different one in Canada or is there some sort of connection that's required? Can I do the taxes myself using a TurboTax package from the US and one from Canada? I have my 2011 returns to use as a guide. I'm scared I'll miss something or do something wrong, but it's awfully tempting under the circumstances.
posted by Babushka to work & money (5 answers total)

I can't speak to the US but Canadian tax form is super easy to use, especially if you use software to do the calculations for you. Even if you do a mistake, CRA is pretty forgiving and sends you a correct Assessment (what you are sending in is just matched up with the information they already have about you).
posted by saucysault at 2:06 PM on February 17

Suggestion? Find a different CPA. I've got one, and my return only cost me $300 last year. It wasn't that complicated, but it would have taken far more time than I was willing to spend on it, and it certainly saved me more than $300 in taxes (and/or fines). But $2,200 does sound a little steep unless your income is well into six figures.

Shop around.
posted by valkyryn at 2:21 PM on February 17

I can imagine that your "residency" status is going to be important here as that really impacts your tax status in both countries and is not always as simple as the date you moved. Have you considered asking your last CPA why the fee was so high? Maybe they over charge or maybe they spent 10+ hrs (@ $200/hr) doing the work because it can be quite complicated. For example: you can't contribute to an rrsp while not being a resident of Canada so I can imagine a good amount of time spent just sorting out that issue.

We are Canadians living in the US and have hired a CPA to do the returns for both countries as its a pretty specific skill set and the returns do relate to each other. We expect to pay around $1200 for this service but other CPA have quoted us between $900 and $3500 to do both returns. Xpat situations are complicated and I think it is often worth the expense. The CRA are pretty friendly and helpful. The IRS seems bent on making sure the process here is very complicated.
posted by saradarlin at 2:50 PM on February 17

I'm a US citizen, and I lived and worked in Canada for parts of two consecutive years, just after college. For both of those years I filed both US and Canadian taxes, which I did myself using the paper forms. (I'm not sure if it would have been easier using TurboTax or other software; I didn't think of it because I was new to the whole tax thing and the forms seemed straightforward enough.)

I had a very simple tax situation at the time (since I had just started work I had no investment income, mortgage payments, or other complications yet), and this worked fine for me after reading the instructions carefully and searching on the IRS/CRA web sites when I had questions. Aside from having to do the taxes twice each year, there only a few other complications. One tricky part was currency conversion; I had to make a spreadsheet to convert each paycheck using the exchange rate from the date it was issued. The other was pro-rating various amounts because I was only in Canada for a portion of the year.

I'm back in the US now, and I still do my taxes myself, though I use tax software to help me now. If I had to file taxes in two countries again, I'd probably still do it myself. If you're comfortable doing it in one country, doing it in two is more time consuming but otherwise not much worse.
posted by mbrubeck at 5:00 PM on February 17

If you have filed in Canada in previous years, you can use Netfile. I've been using UFile online since 2003 for myself and ms scruss. It's super easy; it guides you through every part of the Canadian tax forms. I'd have your 2011 return in front of you, and all of your Canadian 2012 paperwork, and go through the UFile process.

ms scruss is a US citizen, and she gets her taxes done for about $2-300. You may be overpaying.
posted by scruss at 5:12 PM on February 17