Tax preparation can be a tricky business, as the cost of getting your taxes done varies depending on the complexity of your financial situation and the type of tax return you need. For those with simple returns and modest incomes, it's often possible to do the work for free. The IRS Voluntary Tax Assistance Program also provides free tax preparation to low-income taxpayers, as well as to the elderly, disabled people, Native Americans, rural citizens and those for whom English is their second language. Fortunately, technological advances have made it easier for people to prepare their own taxes and avoid expensive tax accountants.
You have the right to have your original tax documents returned to you by the accountant, even if you haven't paid the fee. Your decision whether or not to hire a professional or file your own taxes with the help of accounting software should be based on how comfortable you are with numbers, your familiarity with basic tax rules, and how much time you are willing to spend. Tax preparation companies offer a wide range of other services besides tax preparation, including accounting, record keeping, tax consultation and auditing. When it comes to filing taxes online, there are a variety of options available.
Jackson Hewitt offers relatively little online support, so it may not be your best option if you don't have tax preparation experience. The IRS reports that electronic filing can automatically detect many common errors, but this won't necessarily help you make the right decisions about your taxes. However, companies rely on tax accountants, registered agents, public accountants and tax lawyers to provide oversight and guidance. The free versions of FreeTaxUSA and Tax Hawk cover forms 1040, 1040EZ, 1040A, 1040Z, Annexes A, B, C, D, E, EIC and F, 1099-A, 1099-B, 1099-C, 1099-DIV, W-2, and self-employment income. If your income is too high to qualify for free tax preparation subscriptions, you can still access tax forms that can be filled out for free.
Tax accountants, enrolled agents (who are federally certified and can represent taxpayers in tax courts) and public accountants have advanced training for more complicated returns. Finding tax-advantaged investments, the best way to set up a business or the smartest way to time and classify expenses are part of tax planning to reduce bills in the future. If you qualify, you can get free tax assistance from a human preparer through the Voluntary Income Tax Assistance (VITA) program offered by the IRS. The cost of getting your taxes done is also greatly affected by the credentials of the preparer you work with as well as your experience. After all, you probably wouldn't seek the services of a professional if you had exceptional knowledge of tax matters.
But for a little more money you can hire a trusted tax advisor who cares about your situation, helps you understand tax changes and makes sure you get the maximum refund this year.
