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How tax preparation services can help you

Couple talking to financial advisor
Tax prep services can help you save money and gain peace of mind. Getty Images

If the thought of filing taxes makes you uneasy, you're not alone. The complexity of the tax code and the time it takes to accurately file taxes can be overwhelming. So, every year, millions of Americans pay accountants or other tax preparation professionals to get through tax season.

By working with a paid preparer, you can save time and gain peace of mind. You can even save money, such as if your tax preparer informs you about how to claim tax deductions and tax credits you didn't know about.

To learn more, review your tax preparation options. It's easy to get started

Remember, not everyone needs to pay someone to do their taxes. If your tax situation is relatively simple, then the cost of a paid preparer might not be worth it. You might be able to file taxes on your own or use tax prep software to walk you through the process.

Here's what you need to consider if you're thinking about using a tax preparation service.

Is it worth using a tax preparer?

Figuring out whether to pay for a tax preparer depends on factors like your tax bracket and comfort with filing taxes. 

If you're in a low tax bracket, for example, you might not have much, if any, tax liability. So, paying a few hundred dollars for an accountant to file your taxes might not uncover any money-saving claims. 

However, if you're in a high tax bracket, then an accountant's fees could more than be offset by identifying tax credits or suggesting tax planning strategies, for example, that save you thousands of dollars.

That said, some people prefer the assurance of working with a paid tax preparer, even if it costs more than filing taxes on your own. Tax preparers could also be held liable for tax filing mistakes and thereby cover IRS penalties and interest you might face.

Determining if using a tax preparer is worth it also depends on factors like the complexity of your tax situation.

If you're a W2 employee with no additional income streams and you just take the standard deduction, then it could be relatively easy to file taxes on your own. But if you're self-employed, for example, or you just bought a house and are trying to maximize associated tax deductions and credits, that could tip the scales in favor of paying a tax preparer.

There are multiple tax solutions to explore. Choose the right one for you now. 

How much does it cost to have someone prepare your taxes?

Tax prep fees vary widely depending on the service provider, your location and factors such as your tax situation. Paying someone to complete a straightforward personal income tax return with just W2 income, for example, typically costs less than if you have self-employed income and itemized deductions.

In general, the cost of a paid preparer starts somewhere in the ballpark of $100-200, aside from state and federal government fees. If you go through a national tax prep company, the tax prep fees might skew more toward $100, whereas an individual preparer might lean more toward $200. More complex returns could cost several hundred dollars.

Tax prep software is generally less, often starting at roughly $40-50, though the fees can be more depending on your circumstances, like if you have business income. See what you could qualify for and get started now. 

How do I find someone to do my taxes?

To find someone to do your taxes, you can turn to several resources such as:

  • Recommendations from friends and family
  • Review sites
  • Tax prep chains (these companies can set you up with a tax preparer)

If you qualify for free filing support, you can use an IRS tool to find a provider.

Like with other professional services, you can shop around. Ask for pricing upfront if you're unsure of the costs so you can weigh whether it's worth it for you to work with that tax preparer. Just make sure that you do an apples-to-apples comparison. For example, don't get pricing for your return only from one servicer and then get a quote for filing jointly with your spouse from another. Get quotes for the exact service from each in order to accurately determine which one is better (and less expensive).

Keep in mind that a decision doesn't have to be permanent. If you work with a tax preparer for one year and find that it's not a good use of your money, you could find another provider next year or go back to doing taxes yourself. 

As long as you're comfortable with the tax preparer's ability to accurately file your taxes, you don't necessarily have to take on too much pressure to find the perfect preparer for life.

Ready to get started? Review your options now and find a preparer that's best for you.

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