Who this is for
- Individuals and sole proprietors choosing someone to prepare a personal return
- Owners of small corporations choosing someone for the corporate and personal returns
- Anyone deciding between a CPA, a bookkeeper, a tax preparer or a tax lawyer
Not covered here
- Whether you need an accountant at all, and what to hand over
- What a corporate T2 should cost
- Returns filed in both Canada and the US
How do I find a good accountant in Canada?
Start from the work you need, then check the person. No federal licence is needed to prepare a tax return for a fee. What provincial accounting Acts protect is the CPA title and audit and assurance work. In British Columbia, for example, only members in good standing may use "CPA", non-members may still practise as accountants, and audits and other assurance reports are reserved to authorized members and firms (sections 44 to 47). Each province has its own Act, so the details differ.
A personal return with slips and routine credits is the simple case. The choice needs more care if you have:
- a corporation, because its T2 and your personal return interact through salary, dividends and shareholder loans;
- self-employment or rental income, which add statements and records to the return;
- foreign income or property, or a US filing as well;
- missed years, or a CRA review or reassessment letter;
- a Quebec address, because Quebec residents usually file a second, provincial return.
To build a shortlist, search your province's CPA register or the CRA's EFILE directory (below), and ask people with the same kind of income who they use.
Before you contact anyone, gather your last return and notice of assessment, this year's tax slips (T4, T5 and similar), a list of income sources, any CRA letters, and, for a business, its last year-end statements. Whether you need help at all is covered in do you need an accountant.
CPA, bookkeeper, tax preparer or tax lawyer: who does what?
Each does a different job, and only some are regulated. A bookkeeper keeps the records; a preparer turns them into a return; a CPA can also plan, prepare statements and, if licensed, audit; a tax lawyer handles disputes that reach a court.
| Who | What they usually do | What regulates the role |
|---|---|---|
| Bookkeeper | Records sales, expenses and bank activity; may run payroll and GST/HST filings | No licence is needed; a designation, if claimed, comes from the body that grants it |
| Tax preparer | Prepares and files personal or business returns | No federal licence to prepare; paid preparers must e-file most returns (Income Tax Act, s. 150.1) |
| CPA (Chartered Professional Accountant) | Returns, planning, year-end statements; audits and reviews if licensed | Provincial Act protects the title and reserves assurance work |
| Tax lawyer | Disputes, Tax Court appeals, criminal tax matters | Entitled to practise law in a province (Tax Court of Canada Act, s. 17.1) |
Many CPAs prepare returns, and many preparers are not CPAs. For keeping books yourself or hiring a bookkeeper, see doing your own books. For which corporate statements need a CPA, see year-end financial statements.
How do I check that someone is really a CPA or an EFILE preparer?
Search two public lists. The provincial CPA body keeps a register of its members and firms; British Columbia's Act requires that register to be open to public inspection free of charge (sections 48 and 49). Search the register of the province where the person practises, by name.
For filing, the CRA publishes a directory of preparers certified to file your return through its EFILE service. A paid preparer must e-file all but five returns of each kind (individual, corporation, estate or trust) (s. 150.1(2.3)), so someone preparing returns for many clients normally needs EFILE authority.
A paper return is not by itself a warning sign. The Income Tax Act exempts returns the CRA does not accept electronically, and some returns are on the CRA's EFILE exclusion list.
How do I find an accountant for my kind of return?
Ask for the forms your return actually uses, not "taxes" in general. A preparer who files many employee returns may not routinely handle a business statement, a rental, foreign property or a corporation.
| Your situation | What the accountant prepares | Ask whether they |
|---|---|---|
| Employee, pension or investment slips | Personal T1 | E-file and give you the return to review before you sign |
| Self-employed or freelance | T1 with Form T2125, often a GST/HST return | Prepare GST/HST returns and check CPP on self-employment income |
| Rental property | T1 with Form T776 | Track depreciation (capital cost allowance) and co-owner splits |
| Corporation | T2, financial statements, slips for owner pay, then the owner's T1 | Prepare both the corporate and the personal returns |
| Quebec resident | Federal return and a separate Quebec return | File both |
| Income or property outside Canada | T1 with foreign reporting forms | Handle foreign tax credits and foreign property reporting |
If you also file in the US, use the cross-border tax accountant guide instead.
What should I ask an accountant before I hire them?
Ask questions whose answers you can check. These cover the points that cause most later disputes: who does the work, what the fee includes, and how you review before anything is filed.
- Are you a CPA in this province, or certified for EFILE? (Then check the register and the directory.)
- How many returns like mine do you prepare each year?
- Who prepares my return, and who reviews it?
- What does the fee cover, and what is billed separately: CRA letters, amended returns, GST/HST, payroll, planning?
- When do you need my records, and when will I see a draft?
- Will I review the full return before I sign Form T183, the form that authorizes the preparer to e-file it? The CRA says the information on T183 must match the electronic return. A Quebec resident whose preparer files the Quebec return online also signs Revenu Québec's own authorization form; see do you need an accountant.
- If the CRA asks questions later, will you answer them as my authorized representative?
- Will I get a copy of everything filed?
- Do you work in my language, and will you explain the return before I sign?
Access to your CRA account is given through authorization, never by sharing your sign-in. The CRA's routes are My Account, My Business Account, a request your representative sends through Represent a Client (the CRA's online service for representatives), or Form AUT-01 for offline access only. The steps for a business are in after you incorporate.
How is a personal or sole-proprietor return priced?
This section covers personal and sole-proprietor returns; for a corporation's T2, see what a corporate return should cost. Fees follow the work, so the same person can quote very different prices for two returns. No public rate applies. Ask how the fee is set (fixed per return, by form, or by the hour) and what is excluded.
| What adds work | Why |
|---|---|
| Self-employment income | A business statement, expense review and often a GST/HST return |
| Rental property | A separate statement for each property, depreciation and co-owner splits |
| Sales of property or shares | Gains must be calculated from cost records |
| Foreign income or property | Foreign tax credits and extra reporting forms |
| Quebec residence | A second, provincial return |
| Missing or messy records | Time spent rebuilding income and expenses before the return starts |
| Missed years or CRA letters | Several years of returns, or replies to the CRA |
| Several returns for one household | Credits and benefits are shared or claimed across them |
Do I need to pay an accountant monthly, or only at tax time?
Most people pay an accountant once a year. Work during the year usually comes from GST/HST, payroll or a corporation's books, not from the personal return itself.
The CRA generally assigns an annual GST/HST reporting period to registrants with annual taxable supplies of $1,500,000 or less, though they may choose monthly or quarterly (RC4022). A sole proprietor with an annual GST/HST return and no employees can often use help once a year, provided the books are kept during the year. An annual filer whose net tax was $3,000 or more last year and is again this year also pays quarterly instalments (RC4022).
| You have | What tends to recur |
|---|---|
| Only a personal return | Once a year |
| Sole proprietor, annual GST/HST, no staff | Once a year, plus your own bookkeeping |
| Monthly or quarterly GST/HST | A return each period |
| Employees, including yourself on salary | Payroll and remittances; see running payroll |
| Tax instalment reminders | Payments during the year; see tax instalments |
| A corporation | Year-end statements, T2 and owner-pay slips, plus the above |
Which red flags should make me walk away from a preparer?
A preparer who promises an outcome before seeing your records, or who keeps you from reviewing what is filed, fits the CRA's warning signs. The CRA warns that a preparer who offers unusually large refunds may be using questionable practices. Who is responsible for errors is covered in do you need an accountant.
| Red flag | Why it matters |
|---|---|
| Promises an unusually large refund, or false claims | The CRA names this as a sign of questionable practices |
| Takes its fee from the refund a scheme promises | The CRA lists a promoter's fee taken from the anticipated refund as a sign of a tax scheme; a lawful discounter's fee is the gap between your refund and the minimum below, shown on Form RC71 |
| Asks you to sign a blank form, or T183 before you see the return | The CRA says never sign a blank tax form, and T183 must match the return filed |
| Says a plan is CRA-approved and discourages a second opinion | Both are on the CRA's scheme warning list |
| Wants your CRA sign-in details | The CRA's route is representative authorization |
| Buys your refund for less than the legal minimum | See the discounting rule below |
| Will not give you a copy of the return and T183 | The CRA tells you to keep T183 with your records for at least six years |
Some preparers buy your refund for an up-front payment. The Tax Rebate Discounting Act sets a minimum: 85% of a refund up to $300; for a larger refund, $255 plus 95% of the amount above $300. Fees the discounter, or anyone not at arm's length with it, charges for preparing the return or for the discounting count toward the discount, and paying less is an offence under section 3. The discounter must give you a signed Form RC71.
Can the CRA's free Liaison Officer service help instead of an accountant?
It can help you understand your obligations, but it does not replace someone who prepares your return. The Liaison Officer service offers free support to small business owners, self-employed people and those earning rental income. An officer answers tax questions, explains common errors and recommends how to strengthen your bookkeeping. The CRA says what you discuss is not shared with other areas of the CRA.
The CRA's description does not include preparing or filing returns for you. You still file, yourself or through a preparer.
When is a tax lawyer the right person rather than a CPA?
Once a dispute reaches the Tax Court under the general procedure, only a lawyer can represent you (an individual may also act alone), and a charge of false statements or evasion is a criminal matter for a lawyer; another agent, such as an accountant, may appear only in limited cases (Criminal Code, s. 802.1). Before that, an accountant authorized as your representative can answer CRA reviews and file a notice of objection through Represent a Client.
A lawyer is also the person for a legal opinion. The Income Tax Act's privilege rule covers communications with a lawyer, not an accountant (s. 232).
| Stage | Who may act for you |
|---|---|
| CRA review, audit or objection | You, or an authorized representative such as an accountant |
| Tax Court, informal procedure | You, a lawyer or an agent (Tax Court of Canada Act, s. 18.14) |
| Tax Court, general procedure: individual | You, or a lawyer (s. 17.1) |
| Tax Court, general procedure: corporation | A lawyer; in special circumstances the Court may let a director, officer, employee or partner act instead (s. 17.1; Rules, s. 30) |
| Charges for false statements or evasion | A lawyer, or you in person (an agent only in limited cases, Criminal Code s. 802.1); these are offences under Income Tax Act s. 239 |
An income tax appeal can use the informal procedure, if you elect it, when the amounts in issue, not counting interest, total $25,000 or less (s. 18). Above that, the general procedure applies unless you elect to limit the amount in issue to $25,000 and give up the rest (s. 18.12); the Crown can also ask the Court to apply the general procedure in some smaller cases (s. 18.11). The objection deadline and the audit process are in CRA reviews and audits. If you already have an accountant who stopped replying, see switching accountants.
Example
These examples are illustrative; amounts are in Canadian dollars.
A freelance designer in Ontario
A designer has C$85,000 of revenue and is registered for GST/HST. Her taxable supplies are well under the annual-reporting ceiling, so the CRA generally assigns her an annual GST/HST return. If she keeps her own books during the year, help at tax time with her T1, Form T2125 and the GST/HST return may be enough. She would pay for monthly help only if she wants her books kept for her or chooses more frequent GST/HST filing. If her net tax is large enough to require quarterly instalments, she also has payment dates during the year.
A refund sold to a discounter
A preparer offers to buy a client's C$1,000 refund. The minimum is C$255 plus 95% of the C$700 above C$300, which is C$665, for C$920 in total. Any fee the discounter charges for preparing the return is counted in the discount, so the client must receive at least C$920, less only any GST/HST or Quebec sales tax the discounter must collect on the discount (s. 4), and a signed Form RC71. Paying less would be an offence.
An incorporated contractor reassessed
A contractor's corporation is reassessed for C$60,000 of tax for one year. Its accountant, authorized as representative, answers the CRA and files the objection. If the objection fails and the corporation appeals, C$60,000 is above the informal-procedure limit, so the general procedure applies unless the corporation elects to limit its appeal to C$25,000 and give up the other C$35,000. Without that election it needs a lawyer, unless the Court lets one of its own directors or officers act.
Different for you?
- You are unsure you need an accountant at all: see do you need an accountant.
- You own a corporation and need both the corporate and personal returns done: see filing your corporate return and get corporate tax help.
- Your accountant stopped replying or you want to move: see switching accountants.
- You have a quote for a T2 and want to judge it: see corporate return cost and quotes.
- You have rental property or property outside Canada: see rental income or foreign property reporting, and get individual tax help.
- You moved to Canada this year: see first year as a Canadian tax resident and get individual tax help.
- You missed returns: see catching up on unfiled returns or, for a corporation, catching up on corporate returns, and get corporate tax help.
- You received a CRA review, audit or reassessment letter: see CRA reviews and audits and get corporate tax help.
- You also file in the US: see finding a cross-border tax accountant and cross-border tax help.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| GST/HST annual reporting ceiling Annual taxable supplies threshold amount for an assigned annual reporting period; see CRA exclusions and associates rule | $1,500,000 | CRA: General Information for GST/HST Registrants Checked |
| GST/HST annual filer's instalment threshold Both previous- and current-fiscal-year net tax generally must meet this threshold; annualize a short first fiscal year when testing the following year | $3,000 | CRA: Remit the GST/HST by instalments Checked |
| Minimum a refund discounter must pay on a refund up to the first-tier limit Share of the refund the discounter must pay when the refund is at or below the first-tier limit; fees the discounter (or a non-arm's-length person) charges for preparing the return or the discounting count toward the discount | 85% | Tax Rebate Discounting Act, s. 2(1) and 3 Checked |
| Refund discounting first-tier limit Refunds at or below this amount use the first-tier rate; above it, the base payment plus the excess rate applies | $300 | Tax Rebate Discounting Act, s. 2(1) Checked |
| Refund discounting minimum base payment on a refund above the first-tier limit Fixed part of the minimum consideration when the refund exceeds the first-tier limit | $255 | Tax Rebate Discounting Act, s. 2(1) Checked |
| Refund discounting minimum rate on the part of a refund above the first-tier limit Share of the refund above the first-tier limit that the discounter must pay, on top of the base payment | 95% | Tax Rebate Discounting Act, s. 2(1) Checked |
| Tax Court informal procedure limit for income tax appeals Aggregate of all amounts in issue, excluding interest, at or below which a taxpayer may elect the informal procedure | $25,000 | Tax Court of Canada Act, s. 18(1)(a) and 2.1 Checked |
Primary sources
- British Columbia: Chartered Professional Accountants Act
- CRA: Get help from a tax preparer
- CRA: Discounters
- Income Tax Act, section 150.1
- Tax Rebate Discounting Act
- CRA: Tax schemes
- CRA: Authorize a representative
- CRA: General Information for GST/HST Registrants (RC4022)
- CRA: Liaison Officer service
- CRA: Corporations, resolving disputes
- Tax Court of Canada Act
- Tax Court of Canada Rules (General Procedure)
- Criminal Code, section 802.1
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.