There are, quite literally, hundreds of thousands of tax return preparation companies that are open in the United States. This is good for many reasons- it keeps the prices to hire a company competitive and helps citizens make choices about who they use. The people who work for the companies are accountants and there are over 450,000 of them in the United States. It is good to hire an accountant or a company to figure your taxes for you, especially if you make a lot of money or own a business because even one small mistake can cost thousands of dollars in fees and penalties. If an accountant makes a mistake on your taxes, they are held accountable, not you so they will have to pay a penality instead of you paying the penalty.
Forty seven million Americans filed income tax returns on the computer in 2002. The IRS offers software and internet based help with taxes at no cost. There are also lists of those in the tax preparation industry who will file your federal income taxes at no cost if you pay a small fee for state preparation. There are some people who qualify for Free State tax filing though also. Because it is so easy to do, many people file online for themselves rather than pay someone else to do it. So how does that affect the tax preparation industry? Fees for filing are getting higher. Consumers paid two billion dollars in fees and charges last year to companies who filed their taxes for them. While this is to be expected another problem that comes into play when people are able to do this for themselves is who do you turn to when you do need help?
There are two main companies in the United States that handle the majority of the taxes. These two companies will file entirely for an individual or company. Both also have "Do it yourself" areas on their website. So you can file for free with your federal taxes and pay a small fee for your state taxes and do it all through their website. This means if there is an error; it will be caught most of the time before it makes it to the Internal Revenue Service. The do it yourself approach has put tax companies into a position where they need to be more creative to get more business.