Preparing and filing our tax return can be a hassle. Especially when we don’t have a complete record of our expenses. This can also seem like a quite complex process if we’re doing it for the first time. That’s why almost 50% of us decide to hire an accountant and have them do the job for us. However, knowing how much to pay for tax preparation services might get tricky sometimes.
There are several aspects to consider before we decide to hire a professional accountant to do our tax prep for us. Also, there are many factors that can influence the rates that the accountant decides to assess. In order to understand how much to pay for tax preparation services without it being too much, we will look at 3 different concepts. First, we’ll look at average pricing for tax prep reports. Then we’ll take a deeper look into how exactly tax prep services are charged. Lastly, we’ll go over alternatives to hiring a tax prep pro.
What Is the Average Pricing for Tax Preparation Services?
It is not difficult to find the average costs of tax preparation services online. All it takes is a simple Google search and then checking a couple of websites to make sure the numbers match. Both Thervo.com and thebalance.com show reports from the National Society of Accountants. These reports state that the average price for submitting an itemized Form 1040 with Schedule A is $273, and if you don’t itemize it, it can go down to $176. Also, if you need an itemized Form 1040 with Schedule C, the price can go up to $457. You can consult the NSA website directly for average prices of other forms.
How Are Tax Preparation Services Charged?
More often than not, prices for tax preparation will vary, depending on each person’s situation and record. Most of the accountants will charge a fee for each form or schedule that needs to be filed. If you have worked with the same accountant before, they might charge the same fee than last year’s, plus an additional fee for any changes. Some prefer to go for a minimum tax return fee plus an additional one, depending on the client situation’s complexity. It is not uncommon, though, to be charged on an hourly rate, or even by setting a fee for each item of data entry.
What Are Alternatives to Getting a Tax Professional?
Last week we talked about Cloud Accounting and how you might benefit from them. We bring this up because hiring a professional to help you with your tax return might not be 100% necessary for some. Getting online tax preparation services might be a better idea for some, especially for individuals who already have experience in the matter and have a clean, organized record. There might be other apps and websites like Credit Karma Tax or Wave, that allow you to keep track of your finances, not only during the tax report season but throughout the year, too.