How Much Is Tax Prep

How Much Is Tax Prep

How Much Is Tax Prep

HOW MUCH DOES IT COST TO GET YOUR TAX PREP DONE?

You can’t run away or flee from them. But you can hire someone else to do them. Yeah, we are talking about taxes. For those of us who would like to spend our weekends in the museum with the kids or, frankly, anywhere else but at a desk with tax forms and plans, looking a tax advisor may be our only hope this tax season. How much is tax prep services offered by a professional?  Let us look closer and find out. 

How Much is Tax Prep?

The standard cost for a basic tax form prep is about $176.(1) That cost tops an average of 1040 and state return with no itemized deductions. But do not be scared of that number just yet. While the national standard is a good starting point, a lot of things arbitrates the real cost.

Below  are four questions you should ask yourself as you choose how much to spend on your tax filing:

  1. How qualified do you want your professional to be?

The standard tax preparer will charge less than a high-quality counselor with so much experience. But when it comes to the IRS and your money, the baits can be high, depending on your current situation.

Get your taxes done properly by the best in the business! Now, do not misquote us.  We want you to save money just as much as you do. But when using the services of experts—like tax pros, doctors, and mechanics—we are all for spending more cash on getting the job done properly. Paying an extra $100-300 on the front end may be worth it eventually if the expert is thorough, precise and ends up saving you a lot. Remember, we’re talking about estimates here, so acclimate your professional anticipation thereupon.

  1. How arranged are your taxes?

Show up at a professionals’ office with scrunches receipts disclosing from your pockets and manila folders crammed with disorganized records, and you will surely pay a high fee. Here’s our rule of hitch: The more orderly you are, the less work a tax pro has to do, and that means a lower cost in the long run.

  1. Where do you stay?

The fees for hiring a tax professional like Tax Prep Buddies is different across the country. For example, you can expect to pay more than standard on the Pacific Coast and less in the good ol’ South. (2)  Here are the average tax preparation fees for an itemized 1040 with a Schedule A and state return in each region:

New England (CT, ME, MA, NH, RI, VT): $333

Middle Atlantic (NJ, NY, PA): $290

South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV): $268

East South Central (AL, KY, MS, TN): $210

West South Central (AR, LA, OK, TX): $271

East North Central (IL, IN, MI, OH, WI): $249

West North Central (IA, KS, MN, MO, NE, ND, SD): $214

Mountain (AZ, CO, ID, MT, NV, NM, UT, WY): $263

Pacific (AK, CA, HI, OR, WA): $329

You’ll see all these standards are higher than the $176 mentioned above, but that is because many people who use a tax pro have more knotty situations than the standard 1040 can cover. Either way, expect a little increase in cost based on the quality of the pro, the region, and your precise needs.

  1. How complicated are your taxes?

Let’s be frank for a minute: If you want a plain vanilla tax filing, you could get away with paying a fee close to the standard range. But the more knotty your tax situation is, the more time it’ll take to prepare your return. And we all know time is money.

How Do Tax Advisors Set Their Prices?

When you sit down with a tax advisor for the first time, make sure to ask how they’re going to charge you. It should not be a secret, and you don’t have to be surprised by the cost later on.  A tax advisor will usually follow one of these five methods:

  1. They charge a set fee for each tax form or schedule.
  2. They charge a fee that matches what you paid the year before.
  3. They charge a minimum fee plus more if your taxes are complicated.
  4. They charge a value-based fee—a price based on feeling.
  5. They charge an hourly rate.

If you need assistance with your unfiled taxes we can help prepare them through our virtual tax preparation service.

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