Tax season is here, and although most people look at it as a positive because of their expected refunds, getting to that point isn’t always so easy. Many times the tax preparer you choose can make all of the difference about how smoothly that process goes.
Surprisingly, the easiest and least expensive way to go, when it comes to tax preparers, is popular companies like H&R Block and Liberty Tax Service. They usually charge between $150 and $200, and the process is fairly straightforward. You bring in your W2, fill out the appropriate forms, and they pretty much will take it from there.
In the case of H&R Block, you are provided with a guarantee: If their representatives make an error, the company will cover all fines and penalties.
Another option is having your taxes prepared by a certified public accountant (CPA) or an enrolled agent (EA). They have different specialties but both are trained professionals. Depending on the firm, they can be considerably more expensive and probably don’t offer a complete guarantee. But you can probably trust that these professionals will get it right the first time.
Low-income families and the elderly may qualify to get their taxes done for free through the American Association of Retired Persons Tax-Aide Service. To see if you qualify, go to www.aarp.org/money/taxaide.
If you’re lucky enough to have a straightforward return–defined by H&R Block as 1) you have no dependents; 2) have taxable income of less than $100,000; 3) your filing status is single or married filing jointly; 4) you have no mortgage; and 5) you don’t itemize–then you can most likely do your own taxes. This probably involves the least hassle, but 60% of American have their taxes done for them.
Many times you can weed through the different tax preparers by asking questions to get closer to what you need. Ask about your preparers’ experience. You want to make sure they are knowledgeable because they may need to accompany you and act on your behalf, in case of audit. Ask for a quote. Many times preparers try to add on nonsense fee, so get as much information as you can before committing.
The key is to get organized early. Have all your papers and forms together, as soon as you receive your W2. This allows you to start the process immediately.