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why different prices for tax return ?

Posted: 26 Jan 2010 10:27
by munaye
first Thank you for starting this topic.

my question I see everywhere a different prices for tax return like from 20 to 70 and 80 dollar. why is that difference?
If i go to the expensive ones do I get more money or what?

thanks for the help

Re: why different prices for tax return ?

Posted: 27 Jan 2010 23:28
by Abugida
Hi There,

Choosing your tax preparer is like that of your Doctor. It all depends on the type of service you are looking for , complexity of your tax and your personal preference.
On the average tax preparation can start from a FREE on-line service by IRS for low income families to around $500 by big Franchise companies like HR Block, Liberty,…..

Generally below are the factors that you need to take in to consideration when you chose your tax preparer

Tax Knowledge: If your situation calls for a "Short Form" (1040A or 1040EZ) and you prefer not to handle it yourself,you obviously won't need a high-priced tax professional. Yet, unless you are interviewed by a relatively knowledgeable tax specialist, you may file on the wrong form or overlook important tax considerations that could save you money. Even if you should file Form 1040A, you might still be eligible for tax advantages such as Head of Household status, Child/Dependent Care Credit or Earned Income Credit. Every taxpayer needs an advisor who knows all the questions to ask pertinent to his or her specific tax situation. Yet a CPA or a tax attorney is "overkill" for a simple tax return.

Credentials: most of the states have no specific requirement for tax preparer up to now andwe hope things will be different starting from next year, due to the IRS new requirements, but for now--anyone can "hang out a shingle" and set up shop as a tax preparer. Also, an individual might have credentials generally associated with tax knowledge and not be qualified to prepare non-routine individual tax returns. Relevant education and experience are necessary for anyone to competently prepare the wide array of individual income tax returns filed by the general public. Ultimately, knowledge and experience are the best credentials.

Accuracy: There can be only one correct result for an individual's income tax returns; the one that yields the lowest legitimate tax, which translates to the smallest tax bill or largest refund possible. Judge Learned Hand, a renowned American lawmaker, once said:

"Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes..."

Since anyone can make a mistake, your return should be checked for accuracy, both in math and theory, by a tax specialist other than the preparer. Computerized processing of tax returns can help ensure thoroughness and accuracy, assuming a good software package is used by a knowledgeable tax professional.

Professionalism: Getting your taxes prepared can actually be a pleasant experience if you're being served by a true professional; and you shouldn't have to pay a premium for professional service. You should expect a pleasant office atmosphere with a reasonable degree of privacy and comfort. You should also be treated with respect and courtesy. You shouldn't feel as though you're just another number being processed in production line style. Of course, your personal and financial information should be held in strict confidence. Finally, the person or firm you select should have unquestionable integrity.

Personal Service: Your tax preparer's job is to become thoroughly familiar with your personal financial situation and to help you provide the information necessary to minimize your taxes. He or she should inform and educate you on the tax laws affecting your personal situation. This information will enable you to make decisions as to how your return is to be prepared. Your tax advisor should be working to help you avoid problems with the IRS, but should not behave like an IRS auditor. By the end of your interview, you should have no question in your mind that all your personal concerns were addressed and your best interests were served. Basically, the best tax preparers are not "tax technicians." They are knowledgeable individuals who are not condescending or aloof, but have empathy and genuine concern for the best interests of every one of their clients.

Convenience: Most people prefer to have their taxes prepared at an office near where they live, shop or work. Many taxpayers can only find time to get their taxes done in the evening, or on a Saturday or Sunday. Fast service is also important to most clients. Some people are willing to pay a premium to have their tax advisor come to their own homes or offices. Others prefer to walk-in at their convenience, and many prefer to make a specific appointment. Convenience is important, but other factors should outweigh convenience when your personal tax situation becomes more complex than average. Ideally, you will find a convenient tax preparer with all the other qualities you are seeking.

Availability: Will your tax preparer be there for you in July when you get a letter from the IRS? If you're not sure, you'd better look for another one. A reputable tax professional will be readily available all year round to provide assistance with any tax problems or questions you may have.

Guarantee: What happens if your tax preparer makes a mistake that costs you penalties or interest? Suppose you are audited by the IRS? What if you're not satisfied with the way your return was prepared? Before you contract with a tax preparer, you should find out the answers to each of these questions.

Stability: Even if your tax preparer meets all of your criteria, you should ask yourself if you think he or she will probably still be around to help you this summer, or next year, or five years from now when you need tax assistance. The greatest stability may be available through an established, reputable firm rather than an individual tax practitioner. Yet, most people who seek tax assistance prefer to see the same friendly face year after year. Therefore, a firm that retains its good people for a long time would probably be a good bet, all other things considered.

Price: The cost of preparing any tax return can vary dramatically among different tax practitioners. IRS law prohibits tax preparers from basing their fees on the amount of tax refund obtained by the client. Many tax practitioners charge by the hour, others operate from a standard schedule of charges, and some simply charge "what the traffic will bear." Higher levels of tax expertise typically command higher fees. Ideally, you will find a tax professional with the level of expertise you need for a price you can afford. Perhaps the fairest basis for setting fees is the complexity of the income tax return, determined by the schedules and statements required. This method enables a price to be quoted in advance that will apply regardless of how long it may take for the tax preparer to complete the return. If your tax return is complicated, a tax practitioner may have difficulty quoting an exact price before conducting a thorough interview. However, your candidate should be able to give you a rough idea of the probable fee.

Most people who inquire about price simply want a "ball park figure" to determine whether the cost will be reasonable and affordable. Be wary of tax practitioners who avoid disclosing the basis for their fees in advance. You should also ask if you will be charged extra for tax information should questions arise later, or for assistance in the event of an audit.

Hope this will help you in your choice


Re: why different prices for tax return ?

Posted: 30 Jan 2010 14:07
by munaye
Thank you soo much for detail and helpful answer for my question. I think I can even do my tax myself now. I am sure I will be back with more question if I need answer. Thank you again.