{"id":72332,"date":"2011-03-16T04:00:56","date_gmt":"2011-03-16T11:00:56","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=72332"},"modified":"2023-11-01T14:15:59","modified_gmt":"2023-11-01T20:15:59","slug":"tax-preparation-fees","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/tax-preparation-fees\/","title":{"rendered":"How much does it cost to get your taxes done?"},"content":{"rendered":"

The cost to file income taxes can fall anywhere between zero dollars — as in you do your taxes yourself and file for free — and several hundred dollars, with an average cost of $273 for using a tax preparer, less if you don’t itemize ($159), according to the most recent data available from the National Society of Accountants<\/a>.<\/p>\n

To judge the value correctly, though, those costs have to be weighed against the results you get, your own comfort level with going DIY, plus what could go wrong if things don’t work out.<\/p>\n

To help you weigh the pros and cons, Get Rich Slowly has compiled this guide with detailed cost comparisons.<\/p>\n

<\/span>What are your Tax Preparation Options?<\/span><\/h2>\n

Basically, there are four options. Here’s the run-down:<\/p>\n

Do it yourself<\/h3>\n

For basic tax returns, preparing it yourself is a fairly straightforward process, especially with IRS online forms and instructions. However, the more complicated your tax situation — e.g., your eligibility for itemized deductions or tax credits — the more you might benefit from the type of analysis and advice that a simple online template can’t give you.<\/p>\n

Downloadable tax-preparation software<\/h3>\n

Downloadable tax-preparation software can help walk you through the steps of more complex tax returns and perhaps present you with more options relevant to your situation than would occur to you just working through a form yourself.<\/p>\n

Online tax-preparation services<\/h3>\n

This provides automation similar to tax-preparation software; only you enter your information online rather than onto software that you download to your computer. The difference comes down to how secure you feel having all that information online in the hands of a third party (i.e., other than you and the IRS).<\/p>\n

A tax-preparation professional<\/h3>\n

Tax professionals can give you customized advice that can save you money this year and perhaps make you more tax-efficient in years to come. However, that advice is only as good as the qualifications of the person giving it, so you need to do some due diligence not just on the firm you use but on the person responsible for your return.<\/p>\n

<\/span>A Bit About State Tax Returns<\/span><\/h2>\n

If you live and work in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, congratulations \u2014 you don’t have to worry about state taxes.<\/p>\n

Otherwise, you’ll probably have to file a state tax return. If you had income from multiple states, you may be required to file in more than one state, and this will likely cost you additional tax preparation fees for each state.<\/p>\n

<\/span>How Much Does Tax Preparation Cost?<\/span><\/h2>\n

As you can imagine, costs for the different approaches above vary widely. Even the cost for the same type of approach can differ greatly depending on your situation and which provider you use. As a result, there is no single figure that can be quoted as being indicative of the cost of each approach. Instead, we hope to show the range of costs that are out there which can give you a representative idea of what each entails.<\/p>\n

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  1. Do it yourself.<\/strong> It costs nothing to use the IRS resources and file your returns on its website, though some do-it-yourselfers do incur costs by buying books and other reference materials to help them understand their tax situation. However, the public library system is a good resource instead of buying these types of books.<\/li>\n
  2. Downloadable tax preparation software.<\/strong> Online tax preparation software assists you in completing and submitting the necessary forms. We’ve been monitoring these expenses for a few years now, and there hasn’t been a lot of fluctuation in price over time. The cost goes up depending on how many forms you use or how many state returns you file if, say, for example, you moved during the year.<\/li>\n<\/ol>\n

    Notes:<\/strong><\/h4>\n