How much should you pay for tax preparation services?

When searching for a tax professional or online filing; one of the primary questions that come into mind is, how much should I have to pay for the service? Before you decide to google “tax preparation services near me” or “file taxes online”, read this  short article that will cover the factors that justify the cost of the tax preparation services both online and with a tax professional.

Before we start talking about the three different ways you can file your tax returns, let’s talk about what metrics a tax professional or online software uses to determine the cost of your tax returns. First, the amount of form you have; if you’re an individual who just worked at your local grocery store and received a W-2 at the end of the tax year, then you will most likely pay the minimum amount the tax agency will charge you; since, your taxes will be simple to process. If you have more than two tax forms such as a W-2 & 1099 form, then your tax preparer may charge you more than the minimum. Second, if your tax situation is more complex, meaning: you have rental properties, investment accounts, and businesses; then, your tax returns will be on the higher end, because of the amount of work that must be put in your tax returns.

Online tax preparation services:

Online tax preparation services, digital companies like TurboTax and H&R block tend to have a cheaper rate when filing for tax returns; depending on your financial situation, you might pay between $60.00 – $199.99. If you’re looking for an economical service, these online tax software’s might be the right fit to file your federal tax returns.

Certified Tax Preparer:

Certified Tax Preparer, these individuals have completed all the state requirements to be able to file your tax returns. Many of these tax professionals will charge anywhere from $100.00 – 350.00 depending on where you’re located in the United States & your financial situation.

CPA:

CPA , also known as certified public accountant. These tax professionals will be more expensive, however, depending on your financial situation. Their services might be right for you; especially, for those who own a corporation, and have a more complex tax situation. A CPA may charge you anywhere from $200.00 – 1,500+ on your tax returns.

An Important factor to keep in mind that nothing in this world is free. When companies advertise their services for free, there is always a catch to the word Free. For example, some companies will let you file your taxes for free on their online platform; however, the catch to this is, you’re only able to file for free if you have ONE W-2 form. If you have more than one form, the system will still let you file for free, but only one form. If you want to file both forms, the system will give you the option to file the other form; with service charge.

The price tag on your tax services will vary depending on the way you choose to file your tax returns, and your financial situation; they’re several benefits with filing online or with a tax professional. We discuss these benefits in the article Certified Tax Preparer vz. Online Tax Filing.

– Barron Income Tax