Paying Too Little OR Too Much. . .

Posted by Bruce Mc on Oct 13, 2008 in Choosing a preparer, Tax Preparation | 1 comment

Paying Too Little OR Too Much When Filing A Regular Middle Income Tax Return!

This is another addition to the series “Mistakes made when choosing a paid tax preparer”.

Don’t pay to little or too much when filing your income tax return. That might have sounded odd to you?

Why would you not want to pay too little to have your taxes filed with a tax professional? Well, let me explain. What’s too little or too much? It depends. Let’s start with the “paying too little” for filing a middle income person’s tax return. Who is it do you think are the tax professionals charging the least amount or advertise the lowest fees for tax preparation? Some of these folks are the “fly-by-night” tax preparers. Yeah, they may know a thing or two about filing some tax forms. What they don’t know, they try and figure out as they go along. These may be nice people for the most part, but getting them to be your tax representative with the IRS might not be the wisest decision.

What about paying too much when filing a tax return? Did you know to some people, paying the most money to file their taxes is like a badge of honor? (Or if you want to know the secret truth — it makes the person feel important [like a "somebody"] because they paid $500.00 or $700.00 or $1,200.00 to have their taxes filed!) I’m a rich important guy, “I paid my accountant $600 bucks to file my taxes this year!” as he sips his ‘shaken not stirred martini’ at the country club.

No thank you!

Yes, you’d probably be surprised, but in a lot of cases, when someone in the middle income tax bracket wants to be sure they’ve filed correctly with the IRS they (very foolishly) go pay too much at some CPA’s office with the leather couch and fancy plants and wall hangings, and after they write the check to the accountant for $500 bucks or whatever, they feel pretty good, but their gut tells them something is wrong.

Well, there usually is something wrong. It’s called overpaying when you don’t have to!

Regular retail tax offices with nice, clean working environments are just fine. Getting a quality preparer with multiple guarantees backing up their work, ongoing support and year round access to a manager or person in charge is all you need. Do you need to pay $500.00 or $1,000.00 dollars for that? Actually, on most middle income returns, you can pay in the $150 to $250 range and be just fine. Some high-priced tax professionals will charge you $500 or $600 for the same forms and schedules.

My advice is to find a tax professional who charges by the form so he/she is not pulling fees out of thin air. If he adjust the price that is on him. Like I said, you can over pay or actually under pay – either way, both will come back to bite you in the preverbal end.

Getting the best value for your money is always the right way to go!

Again, I want to invite any and all guest post on this subject. I want to hear from all bloggers or just readers with their own input. Let’s see what you see I am missing. If you have some words of wisdom on this subject please let us share it with everyone, if it is something that has already been covered, so what, I am looking for others to tell what they know or have learned about finding a paid preparer.