How Much Should Preparing a Tax Return Cost?
There are an increasing number of tax payers who can benefit materially from hiring a professional Tax Practitioner to prepare their tax returns. But how much should it cost?
That will vary according to the complexity and completeness of your tax information, although being well organized and having excellent records often can save you money.
Tax Practitioners typically charge in one of the following ways:
- Set-fee rate for each form and schedule required for your tax return
- Fee based on the prior year’s tax-prep costs, adjusted for changes in the client’s situation
- Hourly rate based on the time required to prepare a return or on IRS guidelines regarding how long it should take to complete certain forms
- Flat fee per return
Avoid a payment arrangement where the Tax Practitioner bases his or her fee on a percentage of your refund. Also be wary when the Tax Practitioner seems overburdened and/or has too many clients. The incentive to churn out a high volume of returns can compromise the thoroughness and quality of their work, which means less time for your personal situation.
Regardless of how you are charged, it’s always advisable to present all of your tax information and get a firm estimate before you agree to go forward, especially if it’s the first time you are working with a particular Tax Practitioner.
As a very rough estimate people in South Africa pay an average of R1200 for a Tax Practitioner to prepare their income tax returns. A return with no itemized deductions cost an average of R800.
Finding a Tax Practitioner
It’s not all about the fee, of course. So what should a Tax Practitioner Fee be? A good Tax Practitioner can offer a variety of services beyond completing your return, such as advising on tax saving strategies unique to your employment situation or profession. They also can help you organize and plan for next year’s taxes by suggesting what records to keep and what financial moves to make to lower your tax liability. Another helpful service — determining if you have to pay estimated taxes each mid-year and calculating payments. The bottom line is to make sure your Tax Practitioner is qualified to offer the services you need.
Perhaps the best way to find a good Tax Practitioner is to ask for a recommendation from family, friends, or co-workers. Ask for references and check them. You should interview a Tax Practitioner before you hire the person.
Tax Practitioner Responsibilities
One thing a Tax Practitioner is unlikely to do, research shows, is get you a bigger refund than you’re eligible for. Having an expert do your taxes also doesn’t guarantee that your return will be error-free. But Tax Practitioner do have a good reason to make sure your returns are accurate. They can be subject to severe sanction from SARS and barred from practice for knowingly understating your tax liability or overstating a refund claim.
Tax Practitioner aren’t required to review all of your tax documents or statements to independently verify your information. But they do have to make reasonable inquiries if the data appears incorrect or incomplete relative to your claimed deductions.
As accredited Tax Practitioners, Smart Accounting are experts in providing you with the best experience.