Tax time may not be a pleasant experience for many Americans, but it doesn't have to be expensive as well.
For those who like to tackle their own taxes, there are plenty of options. The more complicated one's taxes, of course, the more likely it is that a filer may want to shell out some dough to hire a pro.
While many Americans prefer to hire a Certified Public Accountant or tax specialist to prepare their federal and state returns, there are an estimated 60 million adults expected to file either a 1040EZ or a 1040A, or what TurboTax calls a "simple tax return." Those filers may want to consider going the self-preparation route to save a few bucks, especially given that the average cost of hiring an accountant stands at $273, according to the National Society of Accountants.
Americans are increasingly looking to handle their own taxes, with TurboTax noting that it saw 5 million people sign on for its Absolute Zero offer, which provides free prep and filing for people with relatively simple returns. H&R Block also offers a free federal filing program for simple returns.
"We are continuing to see an increase in the amount of people moving to doing their taxes themselves," said TurboTax tax expert Lisa Greene-Lewis. "Per the IRS, the amount of people doing their taxes themselves last tax season increased about 5 percent" for people using online filing.
The IRS has partnered with 13 tax software providers to offer free tax-prep software for people making $62,000 or less. However, even if you make more than that, you can file for free, given that the agency's Free File allows people to file using the program's electronic forms. The IRS cautions that people using the latter option "must know how to do your taxes yourself."
Going the route of using a tax-prep service like H&R Block or software companies like Turbo Tax can also get complicated, given the varying fee schedules that are based on income and how many forms need to be filled out.
The average cost of preparing a federal and state return is $215 at H&R Block, although the company has four different products available online, according to GOBankingrates.com.
H&R Block offers online filing options ranging from a free package for simple federal returns up to its premium $49.99 federal package. State filing comes with an additional fee. For software users, H&R Block sells a $19.95 basic software program, which it says is best for simple taxes. Its $44.95 deluxe version is geared toward homeowners, while its premium $64.95 service is targeted toward the self-employed or rental property owners. Small business owners are guided toward its $79.95 program.
As for Turbo Tax, it offers four products, starting with its free service, which is best for simple returns. Its deluxe product, which is its most popular, will set filers back $34.99 for federal returns, and is geared toward maximizing tax deductions, while its $54.99 premier program is marketed toward those filers with investments and rental properties. The service's $79.99 home and business product is best for small business owners and the self-employed. Filing state taxes can range from free (for simple returns) to $36.99 for more complicated returns.
Other tax prep services have similar costs, such as Jackson Hewitt, which also offers free filing for simple federal and state returns. Its most expensive online product costs $49.95 for federal returns and $36.95 for state returns, although it's also offering a $20 Walmart gift card for people who use the service for their state returns.
There's also the option of finding personal help through the Volunteer Income Tax Assistance program, which offers IRS-certified volunteers to help with basic tax preparation assistance, although the program has some limits. For instance, it's geared to Americans who make less than $54,000, or who are elderly, disabled, or have limited English skills, according to the IRS.