Financial Advice: How Much Should You Pay For Tax Prep?

There’s no doubt about the fact that the United States tax code and the process of tax preparation within the United States have become extremely complicated. If an IRS Commissioner has resorted to hiring tax professionals for the sake of filling and preparing tax returns, then the situation is truly outside of the control of many people today.

People should still try to keep things in perspective when it comes to how much they are willing to pay for the services of tax professionals. The National Society of Accountants has managed to give people some averages that they can work with when it comes to getting a sense of what they are going to spend on tax preparation.

Based on 2014 numbers, a 1040 without itemized deductions and with a state return will cost around 159 dollars on average. A 1040 with state return and Schedule A itemized deductions will cost around 273 dollars. A 1040 with a state return, Schedule A itemized deductions, and Schedule C business income deductions will cost people around 447 dollars.

Many people are going to go to Liberty Tax Service and H&R Block, and a tax return will cost around 147 dollars at H&R Block and 191 dollars at Liberty Tax Service. The annual reports from the firms give this impression. There might be some variations, but people should expect to pay around 150 to 200 dollars for their tax returns from services like these.

In the Pacific Coast and New England, people will often expect to pay more money for these same services. Tax and income situations that are more complex are going to raise the expenses associated with what people will have to pay for their tax returns.

There are tax professionals that will use set fees for their schedules and the individual forms. Many tax professionals will just charge based on the actual time that it takes to complete anything, which tends to be a better deal. Others will charge according to the average amount of time that it should take to complete anything. However, the firms that will charge a flat fee for each tax return might be easier for some people to ultimately use since at least they always know what to expect.

However, the fee should not be based on the percentage of a person’s tax refund. There are professionals who try to do this, and this is never the way to move forward. If the tax professional gets incentive pay by the number of returns that he or she prepares, it’s also a bad sign. It indicates that quantity is what matters for them rather than quality, and this can compromise the quality of anyone’s finished tax return.

Tax professionals will sometimes offer discounts to the people who are organized and thorough and who keep excellent records. Tax professionals should also receive the information that they need as early as possible. Working with a Chartered Professional Accountant can make all the difference for a lot of people. A CPA has expertise that they don’t have, but the CPA still needs a sufficient amount of background information.