How Much Does it Cost to Prepare a Tax Return?
How much does it cost to prepare a taxpayer’s tax return? Many taxpayers have this question. Some people hire a professional tax preparer to file their taxes. Others use tax preparation software. Regardless of which option you choose, there are several things you need to consider when selecting a tax preparation company. Here’s a brief overview of some of the most popular options: TurboTax, Block, and H&R Block.
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Preparing taxes is a complicated process. While the average fee for a 1040, Schedule A and state return is $330, it can be much more if you have a lot or rent properties. The fee will vary depending on the complexity of your return and the size of the return. It can range from $600 to $1500. You may be required to pay additional fees depending on where you live.
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Tax preparation fees vary but are usually determined by the complexity of the tax returns and the number involved. The cost of tax preparation services may be determined for each type of tax return or based on an hourly rate that is based on the time required to complete the entire return. Before proceeding, taxpayers should provide all pertinent information and request a firm estimate.
Block
If you don’t have the budget to hire a professional, it is possible to block the cost of preparing a state income tax return. H&R Block’s Deluxe Online Tax Service is for those who need assistance with retirement income and investments. The service supports charitable giving deductions as well as investment sales. You can also receive technical support free of charge and import past and current year data. The Deluxe plan is $55, and includes support on most Form 1099s. State returns will cost you an additional $40.
TurboTax
Before you decide to purchase TurboTax tax software, it is important to determine which version you require. Free versions typically support only the most basic tax forms. You’ll have to upgrade if you want to use more complicated forms. You also have to consider the total cost of the software and service. Free tax software may only cover the federal return and charge extra for state filing. Paid tax services charge a fee for both state and federal returns.
H&R Block
The basic cost for preparing a tax return at H&R Block is $85 for federal and $37 for state returns. These plans are ideal for self-employed taxpayers, small business owners, and freelancers. The paid plans include software that maximizes tax deductions. You may need to upgrade to Self-Employed if you are an independent contractor. This plan costs $110 at the basic level. H&R Block has 10,000 tax office locations in the U.S., Canada, so it’s easy to find one.
Do-it-yourself approach
Preparing a tax return can be difficult, regardless of whether you use a tax-preparation company or do it yourself. Not only is it not easy to understand the federal tax code, but determining the amount you owe can be challenging too. Do-it yourself preparation of a tax return can save you money in preparation fees but can result in costly errors. So it’s important to make sure you understand all the details of the tax code. You can either reduce your tax bill or increase your refund by hiring a tax preparation company. However, it is important to consider the pros and cons of each option. A federal income tax calculator can help you decide.
Cost of itemized deductions
According to IRS, almost 45,000,000 Americans claimed itemized tax deductions on their tax returns in 2013. They were $1.3 trillion in value, compared with an estimated $700billion for those who took standard deductions. The amount of taxes a taxpayer saves by itemizing their deductions depends on the tax rate they pay. Taxpayers in the 15% tax bracket can claim $10,000 in itemized deductions to lower their tax liability. Taxpayers with AGIs greater than $50000 can claim more than $247,000 in deductions.