Things you have to know about Tax preparation fees
Tax preparation is the process of preparing tax returns and generally for compensation. Tax preparation may be done by the taxpayer with or without the help of tax preparation software and online services. Tax preparation may also be done by a licensed professional such as an attorney, certified public accountant or enrolled agent, or by an unlicensed tax preparation business. Most commonly, taxpayers seek outside help with taxes because tax laws are considered to be difficult.
The amount paid to the tax planner will depend on particular needs and the financial planner should be able to provide the taxpayer with an estimate of possible costs based on the work to be performed. Such fees should also consider the planner's hourly rates, flat fees or the percentage he would receive as commission on products you may procure as part of the financial planning recommendations.
The intricacy of a taxpayer’s financial situation determines the time required to accurately answer questions or provide recommendations. There are some factors that can add to the complexity of the process, increasing the time involved in preparing the plan. The fees charged by several tax service companies differ for tax returns and tax planning according to the intricacy of the tax preparation or income tax planning service.
Tax preparation fees are normally collected on an hourly rate billed in one minute increments. Total cost depends on how much work is performed. Some bill by the form which means that the more forms that have to be done in a tax return, the more complex the return, the more time and effort the taxpayer's situation demands and the higher the charges.
Taxpayers must receive written cost estimate that is attuned to the situation before signing an engagement letter. The cost during the first year is expected to be quite high. Once a plan is in place, updates and small adjustments require less time and effort then establishing the initial plan which reduces the cost. Ask the planner for a written agreement that details the services that will be provided. Keep this document for future reference.
Taxpayers must be careful in reading privacy policies, as they will indicate if the company doing the tax preparation plans to share their personal financial information with "affiliates" or "subsidiaries" or "non-affiliated third parties." Some firms employ free or cheap tax return preparation as a "loss leader" to create prospects for their other financial products.
Payment to tax preparation fees may be made generally through cash but some companies also accept checks, money orders, Visa, MasterCard or American Express. Prices posted on the web are subject to change without notice, thus always inquire if the prices are still applicable.
A Final Word
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