What Is the ROI of Hiring a Professional Tax Planner in Ontario?
A professional tax planner is someone who analyzes your finances to determine the best possible route to reduce taxable income while being compliant with tax laws. This involves identifying deductions, optimizing credits, advising on retirement contributions, and planning for investments and business expenses.
A tax planner is not like a tax preparer who helps you submit your tax returns each year. Tax planners work for you all throughout the year, making tailored recommendations to minimize the tax impact during tax season.
Many see hiring a tax planner as a luxury only befitting of wealthy individuals or business owners, but this is not the case. Anyone can benefit from the personalized tax reduction strategies a tax planner will come up with.
If you don’t believe it, stick with us. We’ll be providing a quick guide on the return on investment (ROI) of a tax planner and why getting one is worth the investment, whether you’re a business owner, or just another person looking to pay less taxes.
Calculating the Cost of Hiring a Tax Planner: How Much?
The cost for a tax planner typically ranges from $500-$3,500 in Kitchener-Waterloo.
Everyone’s finances are different. The cost of a tax planner will depend on the complexity of your finances and what types of services you need. For example, if you have a large, diversified investment portfolio that needs tax reductions, that will add to the overall cost.
Costs will likely fall on the cheaper side for an individual with simple finances. The higher end of this scale would apply to business owners who have a far more complex financial situation.
As tax planners in Kitchener-Waterloo, we’re breaking down the costs from the perspective of a local in the Kitchener-Waterloo area. Our estimated price ranges might not perfectly match what you’d find in other parts of Ontario.
Additionally, we can’t guarantee that this is exactly what a tax planner will quote you because some tax planners bill hourly while others quote you a flat fee.
The ROI of a Tax Planner in Ontario
A tax planner saves you money by:
Identifying overlooked deductions, such as home office expenses, which can reduce your tax owed significantly.
Strategically timing income or expenses to reduce tax burden. As an example, you might tell your tax planner that you intend to leave your job next year, and expect to be in a lower tax bracket. They might recommend that you avoid withdrawing from your investment accounts until you’ve left the job, so that the withdrawal will be taxed less.
Plan for tax-efficient investments and retirement savings. A tax planner can make recommendations on when and how much to invest in a certain account, prioritizing your goals while also considering the most tax-advantaged option.
Avoid costly penalties due to errors or missed deadlines by reviewing your tax returns for accuracy and keeping detailed financial records on your behalf for tax purposes.
While these may seem small in the grand scheme of things — small tax decisions like these can save some Canadians thousands of dollars in taxed income.
The techniques a tax planner uses are frequently overlooked, misunderstood, or even completely unknown to the average person. In your busy day-to-day life, you don’t always have time to dive deep into the Canadian tax system, stay current on evolving legislation, or figure out how to apply advanced strategies without risking non-compliance.
As a tax planner, it’s our job to stay on top of these things, whether it be changing tax law, spotting the smallest tax errors, or finding valuable opportunities for tax deductions. We have the time and expertise to make sure you maximize your income and reduce the taxes you owe as much as possible.
How Much You Could Save
To give you an idea of how much you could save by working with a tax planner, let’s draw up an example:
You work with a tax planner who charges you a $800 fee to review your tax return.
The tax planner uses their expertise to find additional deductions and credits, which totals to $3,200.
This means that you saved $2400 ($3,200 - $800), resulting in a 300% return on investment (ROI).
While everyone’s situation is different, the money a tax planner can save you will usually exceed the cost of having one. It also saves you the time and stress that would have come with doing your own taxes and researching applicable deductions, especially since there’s reasonable room for error.