How Much Should You Be Paying Your Tax Preparer?

Tax Professionals have various strategies on how they price their services, leading to cost differences around the world.  The one thing you can bank on is paying for complexity. The more complex your financial situation, the higher your cost will be.

Check out the most common pricing methods us:

• Price per form- some tax preparers may have set cost per form
• Historical cost- Based on prior year fee contingent upon your tax situation remaining the same.
• Minimum Fee- The firm may set a fee in which returns can't be lower than.
• Hourly Rate- Some firms have flat hourly rates that they use for every engagement including tax
• Data Entry Fee- Fee based on each data entry item
•  and many more

What to Expect:

You can expect to pay around $382 for an individual personal tax return, that includes Federal and State tax return, so not expensive at all.

Tip: If you have a bag of receipts or missing vital documents you can expect your cost will go up, for your lack of effort.

Benefits of the Cost:

Inclusions vary by Each Tax Professional, which is why it is imperative for you to read your engagement letter and ask clarifying  questions so that you completely understand what you are paying for.

In Summary:

It is important to know and understand the cost of services.  There are many times when a client may think a cost is outrageous and they start price shopping rather than value shopping and end up with an unqualified Tax Professional.

Prices that are wrongly low should be an immediate red flag.  Ask yourself, can I grow with this tax preparer?  When I need to start doing tax planning can this preparer help me reach goals?  

Paying for Accounting and Tax services will always be a sound investment, as it frees up your time and mitigate your chances of tax penalties.