DIY vs CPA Corporate Tax Cost Calculator
Filing your own T2 is never the price of the software. Work out what your own hours are actually worth, what complexity you are carrying, what gets missed, and the revenue level above which paying someone is the cheaper answer.
net cost of doing it yourself
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What DIY Actually Costs
| Item | Basis | Amount |
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Complexity You Are Carrying
| Factor | Present | What Goes Wrong |
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Side by Side
| Point of Comparison | Doing It Yourself | Engaging a CPA |
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Points That Decide This
What to Do Next
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Disclaimer: There is no legal requirement to engage an accountant to file a T2. A corporation may prepare and file its own return, and CRA-certified software is available to do so. This calculator compares the direct cost of each route with the value of the time involved, and adds estimates for claims commonly missed and for the risk of reassessment. Those two estimates are illustrative modelling, not a prediction: missed claims are modelled at a proportion of revenue scaled by the number of complexity factors present, capped at a fixed amount per factor, and valued at the Ontario combined small business rate of 12.2%; reassessment exposure is modelled as an estimated probability scaled by complexity and by stated comfort with CRA correspondence, applied to an estimated cost of responding. Your own outcome may be materially better or worse than either estimate and depends entirely on your records and circumstances. The late-filing penalty under subsection 162(1) of the Income Tax Act is 5% of the tax unpaid at the due date plus 1% for each complete month the return is late to a maximum of twelve months. Software costs, professional fees and the value of your time should be replaced with your own figures. This page is general information, not tax advice.
You Are Allowed To, and Sometimes You Should
Nothing requires a corporation to use an accountant. CRA-certified T2 software is available, the return can be filed directly, and for a genuinely simple company that is a reasonable thing to do. A single-shareholder corporation with no payroll, no assets, no HST and a hundred transactions a year is not a hard return.
The question is not whether you are permitted to. It is whether the hours, the risk and the things you do not know to claim add up to less than the fee.
The honest comparison is not software against fee. Software against fee makes DIY look free. The real comparison is software, plus your hours at what they are worth, plus what gets missed, plus what a mistake costs, against the fee.
Your Time Is the Largest Line
Most owners estimate the T2 at a weekend. In practice a first-time preparer with a year of transactions to reconcile, capital assets to classify and a shareholder loan to work out is usually into double figures of hours, and much of it is spent learning rules that will have changed slightly by next year.
Those hours are not free even though no invoice arrives. An owner billing $120 an hour who spends eighteen hours on the return has spent $2,160 of capacity, which is more than most fixed fees for the same work. The money is real; it just leaves as foregone revenue rather than as a payment.
Complexity Is What Decides It
| Factor | Why It Raises the Stakes | Typical Cost of Getting It Wrong |
|---|---|---|
| Shareholder loan account | Subsection 15(2) can include the balance in personal income | Tax on money you thought was a loan |
| Payroll and T4s | Slips and remittances must agree with the return | Mismatch letters and penalties |
| HST returns | Reported revenue must reconcile to the T2 | A near-automatic query |
| Capital assets | Wrong class, wrong rate, wrong pool | Deductions lost or deferred for years |
| Vehicle and home office | Benefit and allocation rules | Denied claims and shareholder benefits |
| Foreign income or assets | T1134 and T1135 with their own penalties | Penalties that dwarf the fee |
The shareholder loan is where owner-managed returns go wrong most often and most expensively. Money taken out of the company and recorded as a loan has to be repaid within the time the Act allows, or the amount is included in the shareholder’s income. An owner who has been drawing against the account for two years without understanding that rule can face a personal tax bill on the entire balance.
What Gets Missed Is Invisible
Errors that cost money are obvious afterwards. Claims never made are not, because nothing flags them and the return files cleanly. Nobody writes to tell you that you could have claimed something.
The usual list is unremarkable: capital assets expensed instead of pooled, or pooled in the wrong class; accelerated deductions available in the year of purchase; home office and vehicle apportionment done conservatively because the rules were unclear; the small business deduction limit or the associated company rules misapplied; losses not carried where they would have been worth more.
A Review Letter Is Not a Rare Event
The CRA queries returns routinely, and most queries are not audits. They are letters asking for backup on a particular figure. Answering one is straightforward if the working papers exist and the reasoning was sound. It is a different experience if the return was prepared a year ago by someone who is no longer sure how they arrived at a number.
That is worth pricing honestly. If a letter would mean hiring someone anyway, at a point where the return is already filed and harder to fix, the saving was smaller than it looked.
When DIY Is the Right Answer
- A dormant or pre-revenue corporation with no activity beyond a few expenses
- A single-shareholder company with no payroll, no assets and no HST registration
- An owner with an accounting background, which changes both the hours and the risk
- A first year with almost nothing in it, where the return is genuinely short
- Where the fee is a real constraint and the alternative is not filing at all, which is always worse
And When It Is Not
- Anything involving a shareholder loan you are not certain you understand
- Foreign income, foreign assets or a foreign subsidiary, where the reporting penalties are automatic
- A year with a large purchase or sale, where the treatment drives the tax
- The year before a sale or a financing, where the statements will be read by someone else
- Several corporations, where association and the business limit come into play
- Any year you are already behind, since catching up badly is worse than catching up late
A middle route exists and is often the best value. Keep the bookkeeping in-house and properly reconciled, then hand a clean file to a CPA for the year end and the return. The fee falls because the preparation work falls, and the technical judgement stays with someone who does it daily.
What This Calculator Does Not Cover
- Your actual likelihood of making an error, which depends on you rather than on a model
- Tax planning value, including salary and dividend mix, which is separate from preparing the return
- The cost of fixing a badly filed return, which usually exceeds the cost of filing it properly
- Bookkeeping, which is a separate cost under either route
- Personal returns affected by how the corporate return is prepared
- The value of having someone to ask during the year rather than after it
If the numbers here are close, the deciding factor is usually the shareholder loan and whether you are confident about it. Our corporate tax return filing service quotes a fixed fee up front so the comparison is against a real number rather than an estimate.
Frequently Asked Questions
Common questions on filing your own corporate return.
Related Calculators and Guides
More tools for owner-managed corporations.
Get a Real Number to Compare Against
Send us last year’s financial statements and a description of the business. We will quote a fixed fee including HST before any work starts, so the comparison on this page is against an actual figure rather than an estimate.