The entire country waits anxiously for the Internal Revenue Service to begin accepting tax refunds every year. Some people look forward to an anticipated refund, while others are anxious about what they will owe. While numerous online tax programs vie for your business, consider hiring one of the in-person tax services in your area. There are multiple reasons why hiring one is in your best interest; believe it or not, costs are one of them. Here is just a couple.
1. Knowledge Base
Every year the federal government makes numerous changes to the tax code. These changes are often complicated to understand and even more complicated to apply to your return.
For example, some of the changes implemented in 2022 include the following:
- Larger standard deductions
- Shifts in tax brackets
- Smaller child tax credits
- Lower-income thresholds for childcare credits
- Smaller earned income tax credit for childless taxpayers
- Elimination of the above-the-line charitable deduction
While some online tax preparation programs will prompt you with these changes, they often do not give you the knowledge you need to utilize them effectively. Tax professionals keep up with all of the changes in tax laws. They understand the effects the changes have on your specific return.
2. Costs Savings
While the low costs of online tax preparation software may be attractive compared to some tax service rates, the lower price is not always a saving. While online tax software is easy to use, it depends on you answering the pre-programmed questions to guide you to the correct deductions.
Tax services will understand your situation, ask questions, and search for additional deductions you and your household may qualify for. Finding even one of these deductions may result in savings of hundreds of dollars. These savings can easily exceed any additional fees a tax service costs.
Don't forget the time savings. Depending on how complicated your return is, it can take hours to complete your federal and state returns, along with all of the required schedules and forms. You then often check and recheck before submitting your returns to the taxing authorities.
When you use a tax service, all you have to do is gather your documentation, drop it off, and pick up your completed return. Most preparers will only require your review and a signature or two. Once you complete that, your tax professional can electronically submit your return.
If you make $25 per hour and doing it yourself takes eight hours, you have $200 worth of time invested in the process. This price does not include the cost of your second guessing. For more information on tax services, contact a professional near you.
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