I'm going to add a little wisdom here based on my experience. I've been a tax preparer for 14 years, completed over 3500 returns, and taken more than 500 hours of training. I've had experience with various types of tax organizations. Deciding who to go to to prepare your taxes can be confusing. Let's change that! Here is an explanation of the differences of a CPA, tax preparer, and an EA -- and -- some information about how each of them work. I hope this will help you pick the one that best works for you! ~ An Enrolled Agent (EA) is a designation by the IRS that the individual has passed a knowledge exam on taxes that allows the EA to represent a taxpayer infront of the IRS. An Enrolled Agent may be a tax preparer or a CPA. Not all tax preparers or CPA's are Enrolled Agents. ~ A CPA is Certified Public Accountant. They received this designation by passing knowledge exams on numerous accounting areas. Many CPA's specialize in a specific area of accounting. If you go to a CPA make sure they specialize in taxes. Not all CPA's specialize in taxes or are Enrolled Agents. The CPA must be an Enrolled Agent to represent you infront of the IRS. ~ Tax preparers are trained to prepare taxes. Often they have a educational background or work in accounting but not necessarily. Their knowledge varies based on the number of years they have prepared taxes and educational courses they have taken. Tax preparers at H&R Block begin with a basic training course of 66 hours of class time plus additional hours for updates on new tax law changes and on-the-job training hours. Students of the basic training course must pass a final exam to qualify to work for H&R Block. Experienced H&R Block tax preparers are required to complete a minimum of 30 hours of training each year plus additional hours for updates on new tax law changes. Many tax preparers at H&R Block and smaller tax prep firms are Enrolled Agents. ~ H&R Block charges are determined by the forms used and what is filled in on the form. If you require H&R Block to do bookkeeping (you know that brown bag of receipts) they will charge an additional hourly fee. ~ Most CPA's charge on an hourly basis. From my personal experience the cost of going to a CPA is about 2X the cost of going to H&R Block. Some local firms are even less but may not have an EA or year-around office to help if there is a problem. ~ If you go to H&R Block you will sit with a tax preparer as they prepare your return. The preparer will ask lots of questions, answer questions, and make suggestions for future tax savings. Unless there is a complex tax issue that needs to be researched or missing information, the preparer will complete your return while you are there and you can take it with you when you go. ~ If you go to a CPA they may have you sit with them as they prepare and complete your return -or- they may just have you leave the tax information and call you to pick-up the return when it is completed. ~ Many CPA's hire tax preparers such as myself (often current or former H&R Block preparers) to complete the return. The CPA reviews the completed return and signs it as the preparer and presents it to the client. This is very common in our area especially with larger accounting firms. ~ Tax laws are complex and change each year. I've amended returns prepared by individuals, H&R Block, other tax prep firms, and CPA's. Anyone preparing your return can make a mistake. ~ If you prepare your own taxes on-line be sure to print a copy for your records. The on-line programs are great for simple returns (such as those with just W2's and interest). ~ If you want to purchase tax software Turbo Tax and Tax Cut are the most popular. Be sure to print a copy of your return for your records. The software is a great choice for a return that is not complex and if you are willing to take the time to research items that you are not sure of. ~ If you choose to go to H&R Block or a smaller tax firm call and request an appointment with an experienced preparer and let them know you would like a preparer that will spend time reviewing and explaining your return in detail. They will schedule you with a preparer that meets your needs if they know when you call for an appointment. ~ To find a good CPA or tax preparer ask friends and family for recommendations. Ask them why they like their preparer and see if it matches what your looking for. If you find a someone you like then call next year to schedule an appointment specifically with that person. As for the original poster ... from her explanation they have a rather simple return. If she felt confident to do her own return she could go online and do it. It sounds as though she wants to learn but would like some help this year so going to a professional might be a good idea. Since the return seems to be rather simple I think an experienced tax preparer would be less expensive than a CPA. I'd suggest calling for an appointment in advance and requesting that the appointment be scheduled with an experienced tax preparer that will be willing to answer lots of questions.

If you'd like to see the overhead transpaencies that Dale Ennis, editor of "Canadian MoneySaver" magazine used at that meeting, go to www.canadianmoneysaver.ca and look for "Tips and Tools". There's a lot of other interesting stuff on their website, as well - some of it of interest only to Canadians. Plain paper, no slick stuff - mostly writing; no ads. Pictures of the guys who write the two - three page articles, and contact info at the end of their articles. They are good about answering questions related to those articles, which are often rather condensed to fully cover a substantial issue, if rather sketchily, on occasion. The mag is totally subscriber driven, as they carry no ads. Subscribers asked for seminars with the guys who write the articles - they've been happening for several years. Seminars in winter in warm climes, on cruise, etc. Subscribers meet in about 40 locations in Canada. Ours in London has been meeting for over 10 years, I've been attending for six or so. Usually about 20 attend the monthly two-hour meeting and one learns a good deal about various approaches to money management there - we have to defend our viewpoints, as well. Plus about half of us adjourn to a coffee shop for another hour: manager brought us over a plate of goodies, a few months ago. Cost: gas to get there (and some from nearby communities ride together). (But the coffee at the after-meeting is costly, though they have "loyalty" cards (they're not the biggest chain in the country, by far - Starbucks ain't, either). We usually have the first guy to arrive get a card, then get it stamped for other members' purchases, so often we accumulate nearly the ten needed to get a free coffee during one evening's business. I think the corporation would say that one can only accumulate the increments on one's own accont - but management doesn't appear to care (haven't shut us down, yet, anyway). Sorry - I forgot that this isn't the "frugal" forum! Hope you're all enjoying a great week. One of the great things about retirement - every day's holiday. As I used to say when I was a personal financial advisor - "If you give me 10% of your money - I'll have you retire early". Actually, that message gives a false impression: my main philosophy was that I wanted my clients to learn how to manage their own money more effectively. ole joyful

My suggestion to clients (and others - like, for example, here) was that I don't like getting tax refunds - which means that I paid too much from every payment, last year. If a person gets $1,200.00 back, it means that $100.00/mo. too much was deducted and sent to the income tax people every month last year, on which they paid no interest. Then your loan to them stayed at $1,200. from Jan. 1 till (Canada) the end of April, on which they paid no interest. It used to be that they'd start paying interest on overpaid money beginning May 1 ... but a few years ago they dropped that date back to June 15 (by which time a major part of the refunds had been sent out). If you'd like to make interest-free loans for even a short period, I'd like to stand in line to get some - where should I stand? And how soon do you want it paid back? Heck - I have to pay the bank 5.0% (or, did, until the Bank of Canada cut the Prime Rate this morning ... and most of the banks immediately followed suit - maybe it'll be 4.5% now). I like 0% better than that. When I put my money into the bank, they give me a bit over 0% ... but not much. Have a lovely week, everyone. ole joyful ... who doesn't like to either earn - or pay - interest Why not earn? Taxed too high! (Canadian dividends much lower). o j

Hi again, all you Canadians, Suppose, when the bank stock was at about $105.00, I'd decided to borrow $40.00 using those certificates as collateral (a lot more that the $4.00 original value!), and having certificates issued for the new shares and giving them to the bank to add to the collateral. When the original stock dropped to $68, a drop of about 1/3, (thanks almost entirely to that dratted U.S. sub-prime mortgage debacle - smells a lot like a hot shot lender-generated scam, to me) ... that would have been a real "loss" had I lost my nerve and sold it. If I'd used that $40. to have bought more stock of the same bank (not a good idea - best to own a variety of issues), that $40. stock value bought with the loan, having also declined by 1/3, to $26, would, added to the $68 of the original, produce $92.00 total current value ... more than double the $40.00 that I'd borrowed. So I'd have avoided a margin call on the loan, i.e. bring in some money to reduce the lender's loan to below 50% of total asset value, or more shares to add to the worth of the collateral ... by late today, tomorrow at the latest! And it would have been a lot wiser had I had stocks in about three not only actual companies, but types of industry, used as the collateral: less risky ... or, rather, spreading the risk over a wider area. Also, I still owed the bank $40. .. but the asset that it had bought was now worth only $26. By the way: note this aspect of calculating. The stock price dropped from 105 by a third to 68 ... but it's gotta gain by a half to break even: 68 + 34 = 102. It's a quality stock - it'll recover. I've got time to let it happen ... well, if, at 79, I don't, the executor of my will does. Neither of my major beneficiaries are under any more pressure to liquidate under pressure than am I. The pressure would be to pay income tax, about a year or slightly more later ... and there are other assets at close to real value to take care of that. Or, if everything were undervalued, she could use some of them to borrow to pay the tax, repaying the loan after recovery ... but the trouble with that would be that the loan interest wouldn't be deductible. Further to the rule of 72. At the price of $68., the stock price has doubled from the original $4.00 or so about 4 times: 8, 16, 32, 64. When one divides the 41 year period by the number of doubles, or 4, one gets 10.25, i.e., it took 10.25 years on average to double. Divide 72 by 10.25, one gets 7.02: the growth rate of the basic asset was about 7%. On the other hand, if you know the rate of interest that you expect a certain investment to achieve and divide that number into 72, say, 6%, you'll get a result of 12 ... it'll take your investment about 12 years to double (with no allowance for erosion of the income by tax, or of the value of the asset by inflation). In addition to the approximately 7% growth rate that my bank shares achieved, over the years they paid me about 3% in dividends, for a total growth rate of 10% or so: not too shabby ... especially when it's tax-advantaged, deferred and also tax-advantaged. And the annual rate of dividend grew since my last report to $3.48, which I think that they will make a strong effort to maintain, despite the drop in value of the stock. If they drop it back somewhat, it'll likely hit the stock price for a while, but I won't cry too hard. Earlier, at $105., or 4.5 doubles (8, 16, 32, 64, 128), dividing the 40 years by 4.5 gives 8.888, which is the rate of growth that the stock developed. Add about 3% or a little more of dividends that the shares paid over the years, and you get a total growth rate of close to 12%. I can handle that ... especially when I remember that I pay a low rate of tax on all of those dividends. I use the full amount earned by the loan-purchased stocks, plus part of that earned by my original cash amount invested to pay the interest on the loan, which interest is deductible (as it would not be were I to borrow to purchase an RRSP) and I think that you may get an idea of the reason that I prefer non-RRSP investing in a number of situations. Especially since, were I to cash out at either $105. or $68., after I deducted the $4.00 of original investment, I'd get half of the difference with no tax liability. But every dollar that I withdraw from an RRSP (or successor RRIF after age 69) ... gets added directly to income, and taxed at regular rate. If you can't avoid tax, defer it. But if you can pay some tax now and not only arrange for ongoing income to be taxed at a low rate ... but defer a substantial portion ... and then arrange for a major portion of it to be tax-free ... so much the better. So ... I think that sometimes it makes sense to pay some now, in order to arrange major tax benefits ... not only ongoing ... but later, as well. Not only that, when you have a major portion of your assets in an RRSP ... ... supposing that you need some money during those years of living and want to ask your lender for a loan. Can you use your RRSP assets as collateral for a loan? Officially, no ... unless you have a very accomodating lender, who'll make one without collateral (since they already carry your RRSP). Some will - some won't. Even so, the rate of interest might be higher. Good wishes for increasingly effective management of both your income and your assets. ole joyful P.S. Have you read my thread somewhere around here that outlines how to borrow to invest at almost no net cost (without making any allowance for possible increase in value of the invested asset)? Plus another asking which ordinary person/investor gains from the erosion in value of one's investment by inflation? o j