That fee covers a standard and state 1040 return with no itemized deductions. Tax professionals set prices for preparing tax returns in a variety of ways, so it can be a bit like comparing apples to oranges when you're looking for the best deal. As a general rule, prices increase as your financial situation and tax return become more complex. Those with extremely simple returns and modest incomes can often do the work for free.
They know how to make sure you get all the credits and deductions available to you, such as the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the New York City Child Care Tax Credit (NYC CCTC). Call several tax preparation firms and learn their price ranges if you are looking for the lowest price. Verify a preparer's credentials, even if they have a valid PTIN for this filing season, through the IRS Directory of Federal Tax Return Preparers. In addition, if you are 60 or older, you may qualify for free tax preparation services through Tax Counseling for Seniors (TCE) and the AARP Foundation's Tax-Aide programs.
Some tax lawyers may offer tax preparation and planning services, although not all of them are qualified to do so. Accountants prepare tax returns with much more sophisticated software compared to software sold to consumers. Contact your local CPAs or tax professionals to see if they can offer their contactless services in person. Under the Tax Cuts and Jobs Act, tax preparation fees are considered a miscellaneous expense and are no longer deductible.
The Department of Justice has issued warnings about unscrupulous tax preparers who take inappropriate deductions and tax credits and charge large fees to their clients. Next in the price tier are enrolled agents, who generally have higher rates than people who only work with a Preparer Tax Identification Number (PTIN). As a general rule, tax professionals are prohibited from charging an inordinate fee for providing tax services or charging a fee based on the information on your return. You can save considerably if you buy tax preparation software if your tax situation isn't too complicated.
