April 15th is right around the corner which means that youâ€™re most likely wondering how you are going to navigate through this yearâ€™s tax filing and where youâ€™re going to get them done.
If you are, then youâ€™re on the right track, and if you havenâ€™t given it a thought yet, hurry up because youâ€™re already behind. There are basically three places to get your taxes done. Weâ€™re going to break them down below so you can get a better idea of which method is right for you.Â Â
Full-time public accountants, or CPAs, enrolled agents, and other traditional practitioners, are one of the most professional ways to outsource the headache of getting your taxes done.
Doing your taxes could be extremely easy or extremely complicated depending on how familiar you are with them. If the thought of filing your taxes on your own gives you anxiety and causes you stress, then a full-time public accountant is your best option. Thatâ€™s because a good, professional CPA will navigate you through the difficult questions that pop up throughout the process.
A good rule of thumb when deciding if you need an accountant is to identify how complicated your taxes are. If they are complex and include aspects such as income from multiple states, rental properties, or heavy stock trades, then turn to a CPA to help you plan and file your taxes for that extra assurance.
That being said, a full-time tax professional is usually the most expensive option. Prices can vary depending on where you live, but according to the National Society of Accountants, working with a CPA can run an average of $273. An un-itemized 1040 with a state tax return will set you back around $176, while an itemized 1040 with a state tax return is around $300.
Companies like H&R Block, Liberty Tax, or that place in your local shopping center that has a guy standing outside of it dressed like the Statue of Liberty are who offer retail tax preparation services. This is sort of the middle ground between hiring a CPA and doing the taxes yourself - itâ€™s right in the middle when it comes to professional support and pricing as well.
Retail tax prep is there to serve clients who feel a little overwhelmed when it comes to doing taxes themselves, but donâ€™t need a premium practitioner on an ongoing basis throughout the year.
According to a report by CBS News, the average cost ranges at around $147 at national tax firm H&R Block and $191 at Liberty Tax.
Using a do-it-yourself tax software can be the cheapest way to do your taxes, but just because it is cheap, it does not mean that it is the worst choice. Quite the contrary, tax software has become extremely sophisticated over the years and it is most likely that a retail tax preparation service or a CPA is probably using a professional version of a software themselves.
These intelligent programs can easily identify what forms you need, plug in all of your information correctly, and can even walk you through the pros and cons of whether to deduct something or not. If you need to know what a 1099 is because you don't know if you have one, the software will explain. The process is incredibly comprehensive and educational.
Costs for some of the most popular software are:
- TurboTax Deluxe: $39.99
- TurboTax Premier: $59.99
- TaxACT Basic+: $9.95
- TaxACT Deluxe+: $29.95
- TaxACT Premier+: $34.95
- H&R Block Deluxe: $29.99
- H&R Block Premium: $49.99
The experience of using a software and filing your own taxes can be extremely rewarding, money-saving, and may be the best option for you. But again, it all comes down to how complicated your situation is and how much time and energy youâ€™re willing to give.