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Many folks use tax software to file their taxes in an effort to save a few bucks, but outsourcing your taxes may be more affordable than you think. According to a recent survey by the National Society of Accountants, the average taxpayer spent $176 to have a pro prepare their basic tax forms. That fee covers a standard 1040 and state return with no itemized deductions.
So should you bank on paying $180-ish for expert help at tax time? Not necessarily. While the national average is a good starting place for budgeting, a lot of things determine your actual cost. Here are just a few factors that can affect your individual bottom line.
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Where you live.
For instance, you can expect to pay more than average on the Pacific Coast and less than average in West North Central states, like Iowa and Minnesota.
Your tax complexity.
The more involved your tax situation, the more time it takes to prepare your return. And we all know time is money. Let’s say you have a side business. You’ll want to itemize deductions and file a Schedule C form in addition to your basic 1040 form. In that case, the average cost is around $450. That price may sound steep, but it’s worth it. A tax pro can make sure you don’t miss any deductions, which saves you money in the long run.
The pro you choose.
Remember, we’re talking averages here, so adjust your professional expectations accordingly. It’s true that your average Joe tax preparer will charge less than a high-quality advisor with loads of experience. But that know-how can put your dollars back where they belong—in your pocket! And when it comes to the IRS and your money, do you really want to settle for average?
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Hiring a tax pro may cost a little more on the front end, but it’s proven to save time and money in the long run. Consider the numbers:
- The IRS estimates that taxpayers spend an average of 13 hours on everything from gathering paperwork and reading up on tax laws to completing and submitting a return. Let’s be real: There are more fun ways to spend your time.
- If someone offered you a stack of hundred-dollar bills, would you walk away from it? Of course not! Yet that’s what many people do every year. A recent survey of 2,000 Dave Ramsey Facebook fans found that people who worked with a tax expert to file their taxes got an average of $791 more back in their refund than the average self-filer.
It doesn’t cost a thing to sit down with a tax pro and discuss your options. If you’d like to know more about how to maximize your refund this year, we can put you in touch with a tax pro who’s earned Dave’s seal of trust in your area.