Most tax preparers base their charges on the complexity of their tax situation and on the integrity of their information. In fact, many say they'll charge more when a customer is poorly organized and has incomplete records of their income and deductions. There is no standard fee for tax return preparation. Most preparers charge a fixed return fee, but some may charge an hourly rate.
There are many variables that can determine how much you'll pay for this service. Finally, the complexity of your tax return affects your preparation cost. Tax professionals generally charge per form, per hour, or some combination of both, for example, an hourly rate to organize your shoebox full of receipts plus separate charges for your tax forms. Tax preparers tend to charge more as the April filing deadline approaches, so the sooner you give them your documents, the more you can save.
Many preparers draw a line in the sand somewhere around the last week of March, Freeland says. After that, rates usually start to rise. If you want to prepare your own taxes with filing software, I recommend that you do a couple of different online applications for a free test drive. The IRS has an agreement with tax software companies to provide basic tax preparation and filing for free.
For example, a high school student could be an excellent tax preparer for a simple return: enter your W2, enter your interest income from your 1099-INT, check the standard deduction, and you're done. While some Americans will try to pay their taxes at home, most will seek some form of professional help (about 80% use a paid tax preparer or tax preparation software). Look out for these three things your tax preparer probably isn't honest with you about. Considering how costly some tax errors can be, many consumers like the peace of mind that professional preparation provides.
And it keeps up with the latest developments in tax law and helps me understand my overall fiscal picture. Under the Tax Cuts and Jobs Act, tax preparation fees are considered miscellaneous expenses and are no longer deductible. It's OK to ask a preparer for an upfront budget, says Melissa Labant, director of tax policy and promotion at the American Institute of Certified Public Accountants. As a general rule, tax professionals are prohibited from charging an excessive fee for providing tax services or charging a fee based on the information in your return.
Check the preparer's credentials, even if you have a valid PTIN for this tax season, in the IRS Directory of Federal Tax Return Preparers. Many taxpayers emphasize the amount of their tax bills at this time of year, but many more may be stressed by the size of the bill to calculate their tax bills. If you show up for your tax preparation appointment with a shoebox full of documents, receipts, and miscellaneous statements, you'll pay an hourly fee for the preparer to organize and add up your items.