Are you in need of an accountant but don’t know where to start? Don’t worry, you’re not alone. The question of “when do I need an accountant and how much should I expect to pay?” is a common one with many variables to consider.
Types of Tax Preparation
First things first, let’s address the question of taxes. When most people think of accountants, they think of tax preparation. And while it’s true that many accounting firms do offer tax services, it’s important to note that not all firms handle both personal and corporate taxes. So if you’re calling around to different firms, be sure to ask what kind of taxes they specialize in.
As for personal tax returns, it really depends on the complexity of your financial situation. If you have a simple return with just a few T4 slips and a donation slip or two, you might be able to find someone to do your taxes for as little as $50. But if your return includes business activities or rental properties, you can expect to pay anywhere from $300 to $750. And if you’re a US citizen living in Canada, be prepared for some sticker shock – those returns can cost thousands of dollars. In cases like this, it’s definitely worth it to hire a professional.
Incorporated Business Taxes
Now, let’s talk about incorporated businesses. In most cases, it’s a good idea to use a CPA firm to handle your year-end financials and corporate tax return. But it’s important to understand that there are different levels of assurance that CPAs can provide when it comes to your financial information. The three main levels are review, compilation, and audit. A compilation provides no assurance, a review offers limited assurance, and an audit provides the highest level of assurance.
As you can imagine, the level of assurance you choose will affect the price you pay for your CPA’s services. A compilation will be the most affordable option, followed by a review, and then an audit. Keep in mind that the cost of an audit can vary significantly depending on the size and complexity of your business.
So, to sum it up, the answer to the question of when you need an accountant and how much you should expect to pay is – drumroll please – it depends. Personal tax returns can range from $150 for a simple return to thousands of dollars for a more complex return. As for businesses, it’s generally a good idea to use a CPA firm, and the cost will depend on the level of assurance you need and the size and complexity of your business. This can run in the neighborhood of $2,500 for a compilation, $5,000 or more for Reviews, and $15,000 to $20,000 for Audits, just for context. Again, a lot of factors can affect these guidelines, so talk to a CPA!
Remember, it’s always a good idea to shop around and get a few quotes before making a decision. And if you find a CPA who provides helpful, useful content (like this article), don’t let them go! Happy accounting!
Check out our video on How Much Should An Accountant Cost in 2022