Dealing with all of the paperwork that comes with taxes and audits can be a huge hassle. Dangerous, too; that’s why CRA audit protection is a thing. However, audit protection is another tool in the financial toolbox, so knowing what it is, when to use it, and when it’s needed can is important to get the most of it.
Here’s some info.
What is audit protection?
No, it does not protect you from being audited, rather, it helps you with the auditing process. Much like identity theft insurance, CRA audit protection and the like make the whole process go smoothly, and protect you, should the worst come to pass. You’ll have a professional help you throughout the whole thing, as well as any auxiliary paperwork.
What does it actually do?
Tax collectors aren’t the villains that fiction depicts them as; they’re reasonable people, just doing their job. If you’re undergoing an audit, you’ll need personal records, which cover businesses you own, receipts for any rentals, and the various forms that you need to fill out your taxes.
So, if you’re good at keeping organized and keeping all your necessary documentation accessible, you shouldn’t have too much trouble with audits. Audit protection has a professional to help smooth out the whole auditing process, but if you’re so organized, then it won’t really do much.
How much does it cost?
Like with many things, you get what you pay for. Products like H&R Block offer free in-person audit support, but they tend to have free models, which is still plenty useful. The thing with the free audit protection services is that you can ask for advice online or via e-mail, which, sometimes, is more than sufficient.
Why get audit protection?
Simple taxes and the average amount of forms aren’t really worth getting CRA audit protection for. However, for people who use every tax advantaged account, runs multiple businesses, and have multiple investments in MLPs, the sheer volume of their records make audit protection practically a necessity.
Regardless of great record keeping, having to deal with so many records means you’ll need a professional to make sure everything is done properly.