Many people are fearful of trying to do their own state and Federal income tax returns. Amazon has the several versions of Turbo Tax depending on your tax needs starting at $49 for the Deluxe version, the other three versions are higher priced because they have additional capability depending on the person or business’s tax needs.

At the present time it appears the proposed new tax law if enacted would not be effective until tax year 2018.

If you use a run of the mill tax service that has people twirling signs to get you in , or H & R Block, or some other well known service, beware of the cost considerations. I was a CPA and have prepared tax returns for services periodically. I quit working for services when they started offering loan services to clients so they could get their refund quicker. The last service I worked for set up temporary offices outside military bases offering refunds within 48 hours of the time the return was completed. The cost for that rapid turn around was unbelievable, usually $150 or more for a tax loan. The taxpayer agrees to sign over their refund to the tax service when it comes from the IRS. If you figure the loan interest rate percentage it was an annualized rate of as much as 1000% for the quick turn around. Also the tax preparation service asks if you want audit protection which basically says they will submit additional information to the IRS in case you are audited. It does not mean they will give the taxpayer anything. Some agreements say if the preparation service makes a mistake and it costs the taxpayer a penalty and interest that they will pay for the interest. In many cases the service will not pay the penalty because they argue you owed the tax in the first place. The cost of the franchised tax return services is high and has been rising each year. They hire people that have taken their free course for 12 three hour sessions. They usually pay a small hourly rate just above the minimum wage with the offer that if you stay to the end of the tax season you will get a big bonus as much as $3,000. The problem with that is that usually about the end of February they close down a lot of the offices outside military bases and close other offices to save rent. The result is that none of the people hired from their course group are employed at the end the season so they do not get the $3,000 bonus.

A small tax preparation business may not be insured or offer any recourse if there is a problem with the return. The client needs to ask up front what recourse do I have if you screw up? Also ask what background they have for preparing returns? If the person has just begun preparing returns stay away from them. If they only have a short course in tax preparation no matter how long they have been preparing returns stay away from them.

What about a Certified Public Accountant? There are small CPA firms, medium sized CPA firms, large national CPA firms, and firms that specialize in tax return preparation. A small CPA firm that is honest may be a good choice if the taxpayer’s return is not highly complicated. If the return is complicated , it would be a good idea to select a firm with several accountants and a research library. Usually one of the accountants in a medium sized firm has income tax experience that the other accountants can benefit from if they have a question. The cost will probably be more for the return than the individual CPA. Then there is the large national CPA firm that have a multitude of accountants and several levels of review for the tax return. Partnerships and Corporations are usually their main clients. Individuals that use a large national firm usually find the cost to prepare a relatively simple tax return prohibitive because so many people are involved in the reviewing process. There are CPA firms that specialize in tax return preparation. If that firm has a group that does small returns, with bookkeeping type skills, it is possible that the taxpayer will benefit by having a knowledgeable person at a reasonable rate prepare their return.

Be cautious, maybe you can prepare your own return using Turbo Tax software or a similar software package. Possibly you need a small firm for a simple return. Possibly you need a medium sized CPA firm to prepare your business or partnership return. Or possibly you need a large firm if you feel your tax situation warrants the expertise and if you think there is a possibility of being audited.