Understanding Tax Preparation Fees

With tax time just around the corner, you’re probably about to start getting your paperwork in order, tracking down receipts, and doing everything you can to minimize any tax payout you may be facing. If you want assistance with your business or personal taxes for 2019 but you are worried about tax preparation fees, you may be surprised to find that it’s less expensive and more accessible than you thought. To clear up confusion, our Raleigh accountants are sharing some ways to reduce the cost without sacrificing qualified assistance.

What Do Tax Preparation Fees Cover?

If you want professional tax preparation services and are looking at fees and costs, you’ll want to know exactly what is covered and how the fee is charged. How a tax prep service charges varies from one business to the next, though most fees do cover filling out the 1040 form with your information and electronically filing it on your behalf.

An accountant’s fees may be based by:

• A set fee for each schedule – for example, the price to prepare a form 1040 with Schedule A (itemized deductions) may differ from form 1040 with Schedule C (sole proprietorship profits and losses)
• Minimum fee plus a “menu” of fees for more complex services.
• Hourly rate

Additionally, the accountant may include both state and federal preparation, or charge separately. There are many factors and variables related to the cost of tax preparation, and it’s important to get a clear look at what each business’s fee covers.

Claiming Tax Preparation Fees as a Tax Deduction

Did you know you can deduct your tax preparation fees from your taxes? Not only the actual fee, but any legal counsel, advice from an accountant, or assistance with an audit can be deducted, too. The company or individual who is preparing your taxes will know how to claim the deduction, but if you are choosing to do your own taxes, make sure to include any costs for accounting or tax software in your itemized deductions.

If you are preparing your business taxes, any costs associated can be deducted as a business expense.

Tax Preparation for Senior Citizens

People who are age 60 and older are eligible to receive free tax preparation with electronic filing as well as tax counseling services. Called Tax Counseling for the Elderly Program (TCE), there are certified volunteers nationwide who are able to provide free tax preparation for seniors  between January 1 through April 15.  Most of the TCE locations are operated by the AARP Foundation’s Tax Aide program and are listed on the AARP website or you can call 888-227-7669 to find a local provider in the program.

Tax Preparation Fees for People with Low Income

Tax preparation for low income people can also be free through the IRS Free File system – roughly 70 percent of the U.S. population is eligible, though only a fraction take advantage of this service. The IRS partnered with professional tax preparation services nationwide to provide free assistance to file taxes.

It’s important to note that Free File solely eliminates the actual cost of filing the forms, it doesn’t include counseling and guidance or the cost to ensure you’re getting the largest return or other tax preparation services or software. Additionally, national tax preparation services who are part of the program have different income eligibility requirements, so if you choose this option, you will want to ensure that you meet the income guidelines for the company you choose before you complete the filing.

Contact Us for Professional Tax Preparation Services in Raleigh

If you want to feel confident in the accuracy of your tax returns as well as reduce your tax burden, our team of experienced accountants can help! We provide both business tax preparation and individual tax preparation service and are accepting new clients for the 2019-2020 tax year. Reach out to us today at  (919) 872-0866 or fill out our contact form to schedule a consultation!