Struggling to file your taxes the right way? Well, there are thousands of professional tax services in the U.S. to help make things easier for you. However, the cost of these services can range from anywhere between 150 to 500 dollars.
Navigating the complexities of the U.S. federal tax code can be an intimidating task, even for those with a good grasp of personal finances. But still, a recent study revealed that almost 75% of Americans like to file taxes on their own.
So this begs the question, is it worth hiring a professional to do your taxes? And how big of an expense are you looking at when you’re going with a professional tax service?
These are the questions that I’ll answer today in this article. Let’s dive in.
Should You Hire Professional Tax Services?
Whether you do your own taxes or hire a professional depends on your specific situation. For example, if you’re working a stable job with a reliable paycheck and have minimum liabilities and financial complications, filing your own taxes shouldn’t be too difficult.
However, for business owners or people with a big investment portfolio, going the DIY route to file taxes might complicate things. In my opinion, it’s better to hire a professional and rely on their expertise to get your taxes sorted in this situation.
If you want to know more about when you should hire a professional tax service, check out my blog here.
Hourly Cost of Professional Tax Services
When working with a tax professional service that charges hourly, you’re looking at a cost of around $100 to $200 per hour, according to the National Association of Tax Professionals (NATP). The cost depends on location, complexity of the tax returns, and the qualifications of the tax preparer. Experienced CPA rates fall at the higher end of this price range because of their certification and expertise.
Daily Cost of Professional Tax Services
For those with more complex accounting needs, such as extensive tax consulting or audit-preparation engagements, professional tax services may offer day rates ranging from $800 to $1,500 per day. This approach can be more cost-effective compared to the standard range for typical tax preparation services.
Factors that Affect the Cost of U.S Professional Tax Services
When it comes to filing your taxes, the cost of professional tax services can vary significantly. Understanding the key factors that influence these rates can help you make an informed decision and manage your expenses effectively.
- Complexity of Your Tax Situation
Your financial situation can often affect the cost for tax preparation when done by a professional. Things like multiple income streams, rental properties, or substantial investments can increase the time and expertise required, leading to higher charges.
- Type of Tax Preparer
The qualifications and expertise of your tax preparer can also impact the cost. Enrolled agents, with their IRS representation rights, typically charge the least, while attorneys, with their advanced tax law knowledge, tend to be the most expensive.
- Income Level and Bookkeeping Quality
Generally, the higher your income, the more complex your tax return, and the higher the preparation cost. Additionally, well-organized financial records can help streamline the process, potentially lowering the overall cost.
- Location and Additional Services
Tax preparers in larger metropolitan areas often charge more than those in smaller towns. Furthermore, the cost may increase if you require additional services, such as business forecasting or estate planning. Here’s a quick rundown of the average tax preparation costs in different states.
- California: $250
- Texas: $195
- New York: $235
- Wisconsin: $170
- Colorado: $210
Get in Touch
Although hiring a professional tax service can be expensive, when your tax situation gets tricky, there’s really no alternative to it. I’ve been in the business for a while now, and with me you’ll get the best rates there. You can trust in my professionalism and expertise to get your taxes in order.
Get in touch today and see how I can help untangle your financial complications.
Disclosure: Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James Financial Advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.
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