What are you paying for someone to do your taxes?

[riverwed070707]

I realize cost could be regional but curious what you're paying for someone to do your taxes. Did my own for years. Enlisted the help of a professional the year I got divorced due to splitting multiple properties, kid expenses, etc. that were beyond my level of expertise. That same year I had run the numbers myself just to see how I did and I came out owing around $1500. Pro got me a $3k refund. Well worth the money. The first couple years she charged around $200. Last year it was $350 which she attributed to the "more complicated tax forms". Not faulting her, but I also owed a penalty last year for underpayment on my state taxes since I can only claim DD every other year. I like her and I don't want to undermine her service, but at the same time $350 feels like a lot given I pre-fill out a form with all my normal deductions (charitable donations, property taxes, car registration, etc), come in super organized with all my business and rental expenses in itemized spreadsheets and have my backup documentation neatly organized and ready to go. We run through and plug in numbers for 15 minutes and within 30 minutes I'm out the door and instantly receive a filing notification. Should I shop around or stay?

I have 2 rental properties, 2 side hustles, a full time w2 job and alternating years of having a dependent and I like the reassurance of having someone review - not interested in using a service like turbo tax at this time.

[Fishindude77]

Paid around $600 last year. Could probably get is done a little cheaper, but I've been using these folks for quite a while, they handled our business and they understand my situation.
I trust them.

[disneysteve]

We paid $790 last year. That was up from the year before due to the tax law and form changes. Our accountant also went from charging by the hour to charging by the form.

That's for our personal return and business returns for my online sales and medical surveys. That also covers any and all questions I send him throughout the year, periodically reviewing my pay stubs to make sure things are on track, etc.

I would echo what Fishindude77 said. I trust this guy. That's worth a lot in my book.

[kork13]

Personally, I still do it myself with H&R Block software, which I have access to for free. But I have considered getting a second opinion of late, and I think $200-$400 is fairly reasonable. If you like & trust your tax person, I think you're doing just fine to keep her. You could try to negotiate her fee a touch, but that may not be fruitful. You'd probably do better to simply shop around, see what others charge, and I think you'll find her services to be fairly reasonable. If you're happy with the work she does, just stick with it.

[disneysteve]

I realize cost could be regional

I also owed a penalty last year for underpayment on my state taxes since I can only claim DD every other year.

Fees aren't just regional but based on complexity of the returns, how many forms/schedules are being filed, etc.

As for the underpayment penalty, as I mentioned, my accountant has me send him a pay stub a few times a year to check in and make sure my withholding is adequate. I also make sure to let him know if anything changes, like when I got a raise or an unexpected bonus. Ask your person if her fee includes any sort of mid-year check ups like that.

[srblanco7]

We've been using the same accountant for about 15 years. We trust him and his work and paid $275 last year for tax prep. Of note, about 10 years ago, we received an inquiry from the IRS and I worked with the accountant on the wording of the response. The IRS received our response and promptly closed the inquiry (and sent a letter to that effect). From my perspective, that's a fee well-earned and I'll never hesitate to work with him to prepare our return.

[myrdale]

I think the most they have ever charged me is $120, but I am single and have one source of income. Start to finish she knocks it out within 10 minutes of me sitting in her office. It is the electronic e-file.

[Petunia 100]

We've been using the same accountant for about 15 years. We trust him and his work and paid $275 last year for tax prep. Of note, about 10 years ago, we received an inquiry from the IRS and I worked with the accountant on the wording of the response. The IRS received our response and promptly closed the inquiry (and sent a letter to that effect). From my perspective, that's a fee well-earned and I'll never hesitate to work with him to prepare our return.

I find it odd that they did not just handle it for you, rather than working with you on wording your response.

[Petunia 100]

I will do my taxes on Credit Karma again this year. It's free and easy enough to use. This will be my third year doing my taxes this way (online software available to the public). Previously, I worked in a CPA firm and used the firm's professional software to do my own taxes.

I have to say, it always struck me that so many of the clients really didn't need to be paying anyone to do their taxes. Some people have fairly complex tax situations, so having a paid preparer makes sense for those people. It sure doesn't make sense for everyone.

[Snave]

We pay around $900 and I have been with the same accountant for close to 20 years now. Completely worth every penny. We have owned a small business for the past 6 years and prior to that I did a lot of climbing the corporate ladder and we always seemed to have a few corporate moves and houses and all that comes with that. I feel like ever year we come in with something crazier than the last year that he has to deal with. Heck, we bought part of a restaurant this year that he has to deal with. He makes sure we don't miss anything.

[Smallsteps]

I have to say, it always struck me that so many of the clients really didn't need to be paying anyone to do their taxes. Some people have fairly complex tax situations, so having a paid preparer makes sense for those people. It sure doesn't make sense for everyone.

How complex anyone's tax situation is the key. I myself have seen plenty of people pay more then the OP for a super simple return.

Although like another poster said it may not be regional but in states without a state income tax it may be less. If the person is independent contractor ( setting their own fees) or working for a firm may be a key too.... since firms may charge a set basic fee and then more per additional forms /schedules needed.

If like many other posters here show the more complex in perhaps side businesses, investments, inheritance and etc then it is worth it for a paid preparer. If you feel the increase in fees is more then you think i would speak up and ask about it.

[Butterscotch]

We paid $450 last year and aren’t divorced or have any properties of side gigs, or any of the extra stuff you mentioned. I’d say you’re getting a good rate.

[srblanco7]

I find it odd that they did not just handle it for you, rather than working with you on wording your response.

The rationale being that the letter was addressed to me, and as such the response should come from me. I had not executed any form of agreement to allow the accountant to respond or correspond with the IRS on our behalf.

[Petunia 100]

The rationale being that the letter was addressed to me, and as such the response should come from me. I had not executed any form of agreement to allow the accountant to respond or correspond with the IRS on our behalf.

Letters from the IRS are always addressed to the client; nothing unusual there. Typically, there is something in the engagement letter (that you sign when you "hire" them to prepare your return, or maybe when you pick it up) about handling any questions that may arise regarding your return.

Standard practices may vary, of course. I just found it odd.