Ready To File: A Taxpayer's Guide To Tax-Prep Fees
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NEW YORK (CBS NEWS) - About 50 percent of all tax filers pay a pro to prepare and file their tax returns. Even IRS Commissioner John Koskinen is in that boat. He has said he hires an accounting firm and pays a few thousand dollars to get his taxes done.
If you're among this group, especially if it's for the first time, how do you know how much should it cost?
Most tax preparers base their charges on the complexity of your tax situation and the completeness of your information. In fact, many say they'll charge extra when a client is poorly organized and has incomplete records of their income and deductions.
Preparers can also charge in a variety of ways, such as a set fee for each form and schedule required or an hourly rate for the time spent preparing your return. That hourly rate can be based on the actual time they spend on your returns or on IRS guidelines for estimated times to complete certain forms.
Regardless of how you're charged, it's always best to provide the tax pro all of your information for review and ask for a firm estimate of the cost before you agree to go forward. This is especially needed if it's the first time you're working with this person.
How can you know what you're paying (or being quoted) compared to what others are being charged?
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