Are you tired of spending hours sifting through receipts and bank statements, trying to calculate how much you owe in taxes? Well, you’re not alone. The IRS estimates that it takes the average individual 11 hours to prepare their tax return. But who wants to waste that much time when there’s a better solution?
In 2021, more and more business owners are turning to professional tax preparation services to handle their taxes. Hiring a tax professional can save you time, stress, and even money. But how much does this service actually cost? Let’s dive into the average cost of professional tax preparation services, explore the option of tax prep software, and discuss the benefits of working with a professional tax expert.
How Much Does Professional Tax Prep Cost?
According to a survey released by the National Society of Accountants, the average cost of a basic, professionally-prepared W-2 tax return is $220. This includes the necessary forms and calculations for a salary-based employee. However, if you’re self-employed, the cost will be higher due to the more complex nature of filing a self-employed tax return.
Self-employed individuals often need to use additional forms like Schedule C (Form 1040) to report profits and losses, as well as Schedule SE (Form 1040 or 1040-SR) to report Social Security and Medicare taxes. Depending on your specific tax situation, you may need to file even more forms, such as those for rental income, medical expense deductions, or investment income.
The national average for basic professional tax prep services for the self-employed is around $300. It’s important to note that this number can vary significantly depending on your location and the complexity of your tax situation.
Should I Buy Tax Prep Software Instead?
While hiring a tax professional is the traditional route, there are affordable alternatives available in the form of tax prep software. Services like H&R Block and TurboTax offer software that allows you to file your taxes on your own. On average, these programs cost around $150 to file a self-employed tax return. However, there are a few considerations to keep in mind before choosing this option:
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Lack of Nuance: Tax prep software can calculate your taxes accurately, but it lacks the ability to provide personalized advice on complex tax strategies. Professional tax experts have access to advanced software that can quickly scan financial information for errors, saving time and reducing the risk of an audit.
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Complex Tax Returns: Self-employed taxes are much more complicated than an average W-2 tax return. Hiring a professional tax preparer can maximize savings and minimize the risk of errors in your tax filing.
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Limited Support: Tax software can’t answer your specific questions. If you’re unsure about specific deductions or whether a certain purchase can be itemized, a tax pro can provide immediate assistance, saving you time, stress, and hassle.
Advantages of Hiring a Tax Pro
When you hire a tax expert to handle your taxes, you free up valuable time to focus on what truly matters to you. Whether it’s growing your business, spending more time with family, or planning that dream vacation, outsourcing your tax preparation can help you achieve your goals.
In addition to time savings, hiring a tax professional can often lead to financial benefits as well. While the upfront cost may be higher, the guidance and expertise of a tax pro can help you uncover hidden deductions and optimize your tax filing, potentially saving you more money than you would have discovered on your own.
FAQs
Q: How much does it cost to work with Tax Savvy Jessica?
A: Tax Savvy Jessica offers three tax packages for clients: The Startup, The Entrepreneur, and The CEO. Each package includes various services, such as income tax preparation (both business and personal), year-end tax review, tax strategies, and more. For detailed pricing information, it’s best to reach out to Tax Savvy Jessica directly.
Conclusion
When it comes to tax preparation, there are several options available to you. Hiring a tax professional can be a convenient and beneficial solution for business owners who want to save time, reduce stress, and potentially uncover hidden deductions. However, if you prefer to handle your taxes yourself, tax prep software can be a more affordable alternative. Ultimately, the choice depends on your specific needs and comfort level with tax preparation.
So, take a moment to evaluate your options and consider what matters most to you. Whether you decide to work with a tax pro like Tax Savvy Jessica or opt for tax prep software, remember that the goal is to make tax season as smooth and stress-free as possible.