In my family, tax prep is quick, cheap, and easy. Why? Because my dad is a CPA and has been preparing my taxes for me since I filed for the very first time more than a decade ago. But you don’t need to have an immediate family member with a finance degree to get free or deeply-discounted tax prep. Instead, my dad and I teamed up to bring you ten tips that – whether you’ve got a simple return or a complicated one – will help you cut costs.
- Prepare your taxes yourself. This is, naturally, the no-brainer of free tax prep. If you prepare and file your returns yourself, you won’t have to pay anyone else. But, my dad warns, DIY tax prep is not one-size-fits all. “People tend to underestimate their financial situation,” he says. The IRS offers free federal forms, but my dad prefers the TurboTax Federal Free edition for DIYers.
- Share the software. If your tax return requires more than the free federal editions provided by many software companies, you may have to upgrade to the pricier program. Most software will let you prepare multiple returns per license, making it possible for multiple families or filers to split the costs of the program.
- Get a free consultation. When in doubt, my dad suggests scheduling a consultation with a professional tax preparer; these consultations are usually free (make sure you ask when you schedule your appointment) and will give you a better idea of whether your return is simple enough for you to do on your own.
- Use the IRS’s Free File program. If your AGI – that’s adjusted gross income for you tax novices – is below $57,000, you are eligible for this government program, which lets you choose from more than a dozen Free File companies (note: not all companies are licensed to work with taxpayers in every state).
- Find a pro ASAP. The window for “early” tax prep help has already closed; my dad considers anyone coming to him after March 1 as a procrastinator. “You’ll pay a premium for tax prep the closer you get to April 15,” my dad says. Next year, strive to have everything in to your tax preparer in January or February, when you may be able to negotiate a lower fee.
- Barter. If you plan on working with an individual tax preparer – like my dad – instead of a company (think Jackson Hewitt or H&R Block), you may be in luck. That’s because my dad (and some of his CPA colleagues) have been known to barter for free tax prep. “Last year,” my dad remembers, “one of the neighbors offered to have his kid mow my lawn once a week for the entire summer if I did the family’s taxes for free. It was a great deal for both of us.” If you have something to offer, whether goods or services, give it a shot; the worst your tax preparer can do is turn you down.
- Avoid hourly charges. My dad’s always charged his customers a flat fee for their tax prep, based on how complicated their financial situation is. He suggests avoiding tax preparers who charge you by the hour. “Some – not all, but some – aren’t efficient with their time,” he says, “and you end up paying for it.”
- Ask for a bulk-rate discount. Are your mother-in-law, adult son, and best friend all looking for a certified tax preparer? If you shop around together, you may be able to find a pro who will give you all a discount.
- Ask for a referral fee. If you’re already happy with your tax preparer, ask if he’ll give you a referral or finder’s fee if you bring him new customers. My dad gives returning customers a $25 discount for each new taxpayer they refer to him.
- Search for situation-specific discounts and freebies. The AARP offers free tax prep through its Tax Counseling for the Elderly program; many military bases also offer free tax prep to families stationed there. Your employer or community center may also have program designed to help you cut costs. It’ll only cost you the effort of looking.
An important thing to remember if you decide to work with a tax preparer: it’s vital that you check his or her credentials. The IRS requires all tax preparers to register and obtain a Preparer Tax Identification Number, of PTIN. Ask your preparer before handing over your tax info to make sure they are legit.