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Tax Preparation Prices

Tax professionals make use of several different methods for setting their prices for tax preparation services. Therefore, it is quite difficult to find out what a fair price is and what isn't. It is a general consensus that tax preparation prices depend on how complex the tax return is. Naturally, a more complex tax return would require more services and expertise, and thereby it would cost more.

The National Association of Tax Professionals conducted surveys and found some of the methods that tax preparers use for pricing. Some have a set fee for every tax schedule or tax form. Some have a fee based on the previous year's fee along with an additional feel for changes that might have occurred in their client's tax situation. Some professionals have a minimum tax return fee that gets added on to according to how complex the client's situation is. Others have a value-based fee that depends on the value, taken subjectively, of the tax preparation service. There are professionals that charge an hourly rate for the time they spend preparing the client's tax return. Finally, there can be a set fee for every item of data that is entered.

Each firm decides its fee structure. If you plan on comparing a variety of tax professionals, you should ask them how they come up with their prices and ask for an estimation of how much your tax preparation service will cost. An accurate price can be quite difficult for them to quote, because of per-hourly, per-item or per-form based rates. But you can accountants for the most likely price category that your tax preparation services will fall into.

You should also find out what exactly is included in the fee for the tax preparation service. By asking an accountant this, you can make sure that your tax preparation price is reasonable and appropriate. Ask whether they charge additional amounts for electronic filing, or if you need them to give you a copy of the tax return later that year. Does the price include a planning meeting or tax consultation during which you can clear your doubts and get advice on minimizing your taxes?

There are some firms, particularly the franchise chains that charge extra for audit protection. Essentially, this is a way for you to prepay for costs that are related to an audit of your tax return. You can ask the accountant how much they charge if your return is audited, and if they correct any mistakes they might have made free of charge.

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