Tax Preparation Fees

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stargazerlily03
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Tax Preparation Fees

Post by stargazerlily03 »

I realize fees vary depending on the complexity of the tax return. We do our own. My sister pays $200 for hers which includes pension X 2, SS X 2, interest, dividends, capital gains, foreign taxes; not complex in my opinion. My niece who just started working last year went to a tax preparer (a friend of a friend) and he wants $350? For a W-2 and one interest bearing account. My DD's beau gets his prepared for $75. Your opinions?
livesoft
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Re: Tax Preparation Fees

Post by livesoft »

People with math anxiety get taken advantage of. An acquaintance asked me to review their tax return which cost them $750. They had no taxable income, but didn't want to use free tax software themselves because they didn't want to read the instructions.
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steadyosmosis
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Re: Tax Preparation Fees

Post by steadyosmosis »

I learn(ed) so much more about tax-efficient investing by doing my own taxes, with pencil and paper.
Plus, it is free.
Age<59.5. Early-retired. AA ~55/45. Taxable account, Roth IRA, HSA...all are 100% equities. 100% of fixed income is in tIRA. I spend from taxable account and rebalance in tIRA.
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CAsage
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Re: Tax Preparation Fees

Post by CAsage »

The $200 sister's return is a fair bargain - while not complex, it's a lot of different forms and data to enter and verify (and I can vouch that some brokerage statements are a total frag heap). $350 for a simple return is quite pricey.... but so much depends on the location. $75 for any financial help is a real steal.... e-filing alone costs the provider money! Honestly, people need to learn to do simple returns by themselves... like balancing a debit account, or shopping for a new phone. Gotta learn basic financial fundamentals. And most of the software is menu or query driven, so it's not hard.
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arcticpineapplecorp.
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Re: Tax Preparation Fees

Post by arcticpineapplecorp. »

stargazerlily03 wrote: Wed Mar 27, 2024 7:48 pm I realize fees vary depending on the complexity of the tax return. We do our own. My sister pays $200 for hers which includes pension X 2, SS X 2, interest, dividends, capital gains, foreign taxes; not complex in my opinion. My niece who just started working last year went to a tax preparer (a friend of a friend) and he wants $350? For a W-2 and one interest bearing account. My DD's beau gets his prepared for $75. Your opinions?
If your niece's income is under the limit (IRS says $64,000 or less) she could have it done for free by a VITA preparer (I'm one):
https://www.irs.gov/individuals/free-ta ... -taxpayers

there's a tool at that link to find a site near you.

hurry, tax season's quickly coming to an end!
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FiveK
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Re: Tax Preparation Fees

Post by FiveK »

arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
mageedge
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Re: Tax Preparation Fees

Post by mageedge »

Like some others on the forum I am a Tax Aide with the AARP sponsored program that offers tax return preparation and e-filing for no cost. VITA is a similar IRS certified program and while VITA focuses on low income, the AARP program is open to anyone - no age or $ limits, no association with AARP needed. The aides are all volunteers who go through IRS training and certification to acquire the necessary knowledge to assist tax payers. There are certain areas of taxation that are "out of scope" for our programs but these are not relevant to the vast majority of people who need to file.

I'd also echo earlier comments that, for people just starting out, it's a great learning exercise to do your own taxes using one of the various free file programs that are available for lower income, more basic returns. And, if you really want to understand it, go "old school" - get the paper forms and prepare your return by hand!
montanagirl
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Re: Tax Preparation Fees

Post by montanagirl »

FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
Yes, we get some six figure clients looking for a free return.

And they are the most entitled, drop off papers and go shopping, always pick the last appointment slot so we're sitting their dealing with their brokerage statements while everyone is ready to shut down for the day.

Anymore I just put those bundles back on the stack.

/r
HereToLearn
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Re: Tax Preparation Fees

Post by HereToLearn »

If the niece's income is over the free filing limit, she can buy TurboTax for $50 and easily file her own taxes. There may be less expensive options but I am familiar with TT.
nostresshere
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Re: Tax Preparation Fees

Post by nostresshere »

Buying Turbotax for even on year is the best investment ever.

Too many people have ZERO understanding of taxes.

they throw away money every year as a result.
andypanda
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Re: Tax Preparation Fees

Post by andypanda »

We pay $600 to $700.

I did my state and federal taxes from 1965 to 2015. I did my parents' taxes from 2006 to 2017, including the years required for probate. I did my BIL's taxes for 3 years while he was dying of brain cancer, including probate and one year it required Virginia, Ohio and PA taxes. Simple, but a pain.

For 20 years I did them in ink and often without using a calculator. I like numbers and once upon a time I was a physics major.

Beginning in 2016, four years after I retired, I hired the tax prep/cpa/accounting outfit that my wife used to use when she was self-employed.

So, we pay between $600 and $700 a year and I don't care. I'm 73 and I don't have to do it. I don't have to read the tax law changes or even get the Laserjet out of the closet in the guest room. I complete a 20- to 30-page workbook for them and forget about it.

The first year I used them I was sitting in my boat fishing when she called to tell me it was time to come in a sign the forms. It's money well spent.
tibbitts
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Re: Tax Preparation Fees

Post by tibbitts »

stargazerlily03 wrote: Wed Mar 27, 2024 7:48 pm I realize fees vary depending on the complexity of the tax return. We do our own. My sister pays $200 for hers which includes pension X 2, SS X 2, interest, dividends, capital gains, foreign taxes; not complex in my opinion. My niece who just started working last year went to a tax preparer (a friend of a friend) and he wants $350? For a W-2 and one interest bearing account. My DD's beau gets his prepared for $75. Your opinions?
$350 seems maybe a little high side for that. $75 is definitely seems below normal for any return. Your $200 example seems reasonable.

Maybe your niece wasn't exposed to d-i-y tax prep, so she just assumes that most/all people go to a preparer?
Target2019
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Re: Tax Preparation Fees

Post by Target2019 »

stargazerlily03 wrote: Wed Mar 27, 2024 7:48 pm I realize fees vary depending on the complexity of the tax return. We do our own. My sister pays $200 for hers which includes pension X 2, SS X 2, interest, dividends, capital gains, foreign taxes; not complex in my opinion. My niece who just started working last year went to a tax preparer (a friend of a friend) and he wants $350? For a W-2 and one interest bearing account. My DD's beau gets his prepared for $75. Your opinions?
I have experience with various methods of tax prep. My brother was an accountant, and I worked with him during tax season to prepare individual returns. He worked an incredible amount of hours and prepared over 600 individual returns in three months. In 1990's he charged under $100 for Fed and State. When he sold the business in 2010, the next guy charged well over $200.

For three recent years I worked during tax season for other family. His CPA accounting business was well organized, with several employees. He charged less than $150, and recently sold his business to another firm. Their minimum jumped to $500.

If you can't DIY, then market price becomes your challenge. A company charges what it needs to stay in business. That isn't a fixed amount that is the same for every business. There are businesses that charge $2500, $1000, $500, and so on. If they also do accounting for your business, and business returns, of course they'll do your mom's return for "free."

If a small preparer is building a business and attracting clients, they have a price that brings in new clients. If you are a client worth keeping, the price will go up each year to meet rising business costs. If you are a problematic client, they will will not desire to waste time on your return.

If a preparer has an established CPA firm, they need $500-$1000. That's my opinion, of course. But labor costs, network, servers, and IT cost a bunch.

Without much formal training in accounting, after 25 years I can do your sister's return in 1-2 hours. It's sounds like our personal return.

Now when the various pieces go to a larger firm, more people get involved. There's scheduling and drop-off. Someone scans all the forms. The folder goes to a junior preparer. If you are a past client, the inputting is much simpler, but still requires careful checking of many numbers. Oops, the preparer sees you forgot bank interest based on last year's return. They call you and more time is required. The return goes into waiting for more info mode. Eventually a CPA looks at and approves the return. You are notified to come in, approve the return, and electronic submittal goes forward.

That's a lot of complexity for $200!
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stargazerlily03
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Re: Tax Preparation Fees

Post by stargazerlily03 »

Thank you all for your responses. I am guessing my niece does not want to be bothered learning or attempting to do her own taxes and her salary exceeds the limitations of the free tax software/preparation. My sister does not either. Forgot to share that my other sister was charged $650 30+ years ago and told me it was $25 per page. She won't say anything anymore about her finances or taxes in anyway as her DH is an abusive control freak (whole other topic).

I can see the big outfits compared to smaller ones and the need to profit. Was just wondering what people pay nowadays to have them done.
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Re: Tax Preparation Fees

Post by jebmke »

FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
When you discover that you are riding a dead horse, the best strategy is to dismount.
mjg
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Re: Tax Preparation Fees

Post by mjg »

jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
jebmke
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Re: Tax Preparation Fees

Post by jebmke »

mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
Yes; I think it is a site decision for Vita. TaxAide is not allowed to set income caps by policy.
When you discover that you are riding a dead horse, the best strategy is to dismount.
is50xenough
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Re: Tax Preparation Fees

Post by is50xenough »

AARP vita trained volunteer here. Very fulfilling for me. Love the folks who come in who get under $300 back (we have some state credits that might make up the entire refund for low income elderly (or not so low income, not so elderly). They would have lost all of it if they went to a "professional" who would charge for the return (in the $200-300 range I am told).

While I agree that folks just starting out should attempt their own, I also see many clients who tried their own and were confused. So many people just don't have high level financial literacy.

I love being there for all these folks and do my best to file the most accurate return that I can that maximizes their financial return or minimizes their owned taxes.

In any case, we don't turn away based on age or income but only based on those items that are considered out of our scope. So far my highest family income for a client was about $250K. I think all those described in the post would benefit from AARP tax prep available in all 50 states I think
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pahkcah
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Re: Tax Preparation Fees

Post by pahkcah »

I'm another Tax-Aide volunteer. Just want to point out that although Tax-Aide does not have a maximum income limit, there are limits imposed by certain taxes paid by “high earners”. These include the Alternative Minimum Tax (AMT), additional Medicare tax, and Net Investment Income Tax (NIIT). Any taxpayer’s return subject to these taxes is out of scope for Tax-Aide.

The threshold amounts for the additional Medicare tax and NIIT are:
- Single, head of household — $200,000
- Married filing jointly — $250,000
- Married filing separately — $125,000
- Qualifying Surviving Spouse - $200,000 ($250,000 for NIIT)
Last edited by pahkcah on Thu Mar 28, 2024 6:32 pm, edited 1 time in total.
dorster
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Re: Tax Preparation Fees

Post by dorster »

jebmke wrote: Thu Mar 28, 2024 3:47 pm
mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
Yes; I think it is a site decision for Vita. TaxAide is not allowed to set income caps by policy.
I just started volunteering so am not an expert but the IRS site, taxpayer advocate, and benefits.gov all imply that the income limit is part of the program (benefits.gov lists what I believe to be an older limit).

I have heard that VITA sites can have a certain percentage (10%?) of returns be over the income threshold. This was relayed to me in the context that some volunteers would use VITA software to file their own returns or family members. Maybe that's the wiggle room?
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vnatale
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Re: Tax Preparation Fees

Post by vnatale »

HereToLearn wrote: Wed Mar 27, 2024 9:43 pm If the niece's income is over the free filing limit, she can buy TurboTax for $50 and easily file her own taxes. There may be less expensive options but I am familiar with TT.
H&R Block's software is less expensive and easier to use.
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vnatale
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Re: Tax Preparation Fees

Post by vnatale »

mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
I've been involved with preparing tax returns.

I've seen ones with relatively high income but were fairly simple returns to complete. On the other hand I've also seen those with relatively low income but fairly high complexity.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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dodecahedron
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Re: Tax Preparation Fees

Post by dodecahedron »

jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
VITA site coordinator here. We most definitely DO have a “legal leg to stand on” in turning away taxpayers with incomes over our IRS-specified income limit.

VITA sites are funded by IRS grant funding, subject to Congressional appropriation, explicitly designed to support low-income taxpayers. We are allowed to make occasional exceptions, which I have done for particularly extenuating circumstances (example: taxpayers with unusual anomalous one-time unexpected bump in income, e.g., a perennial low/moderate income taxpayer finally approved for SSDI after a many-year delay with a big lump-sum award of multiple years of prior-year SSDI all arriving in a single tax year, OR a taxpayer who unexpectedly lost their job resulting in the unpaid remaining balance of a large 401k loan originally intended to be paid back gradually via payroll deductions suddenly materializing as gross income), etc. In addition, many sites (not mine) allow their preparers to use the software for their own personal prep for themselves and/or their family members, as a “perk” to recruit volunteers even if their incomes exceed the IRS VITA limit, which is currently $64K. If such “exceptions” exceed 10% of the tax returns prepared at a VITA site, the site’s future grant funding could be in jeopardy.

AARP Tax Counseling for the Elderly (TCE) sites also receive IRS grant funding, but, unlike VITA, TCE grant funding is NOT contingent on any kind of income limit. Instead of targeting low-income taxpayers as the VITA program does, TCE programs must prioritize the “elderly,” defined by IRS as those over age 60, although TCE sites are also allowed to serve younger folks as long as it does not interfere with their primary mission of serving seniors.

Edited to add: In practice, our VITA site (located in a very high poverty neighborhood) has its hands more than full trying to serve as many low and moderate income taxpayers as possible, and I have found taxpayers with higher incomes very gracious and understanding and respectful of our income limits. In 20 years of operation, nobody with an income over our limit has ever “made a stink” about our income limits, and I do tell them that there are nearby AARP sites without income limits that may be available to assist them.
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dodecahedron
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Re: Tax Preparation Fees

Post by dodecahedron »

vnatale wrote: Fri Mar 29, 2024 9:33 pm
mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
I've been involved with preparing tax returns.

I've seen ones with relatively high income but were fairly simple returns to complete. On the other hand I've also seen those with relatively low income but fairly high complexity.
Low income tax returns can be incredibly complex, running to far more time and far more pages than some straightforward tax returns for higher income taxpayers, if there are refundable credits involved, especially in complicated situations where children are living in multi-generational households with tie-break rules involved as to which taxpayer is entitled to claim which children. Issues of parental incarceration, domestic violence orders, removal by CPE, foster care arrangements, court-ordered changes of custody, etc. can make things very complicated. (Our VITA site is located in a place with very high rates of poverty, mass incarceration, domestic violence, and other challenges.)

When I agreed to take over this VITA site almost two decades ago, I thought I knew a lot about taxes, and that low-income taxpayer returns would all be Form 1040-EZ, but I honestly had no idea how clueless I was and how hard it was going to turn out to be. And it has only gotten more complicated with every passing year, with NY “decoupling” from Federal tax rules post TCJA only further complicating things. The so-called VITA ‘bible,’ Pub 4012 is many times bigger than the first one I was issued in 2005. The growing number of low-income taxpayers with “gig economy” jobs (e.g., driving for DoorDash and similar) adds further challenges.

That said, it is also incredibly rewarding.
jebmke
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Re: Tax Preparation Fees

Post by jebmke »

dodecahedron wrote: Sat Mar 30, 2024 9:53 am Low income tax returns can be incredibly complex, running to far more time and far more pages than tax returns for higher income taxpayers, if there are refundable credits involved, especially in complicated situations where children are living in multi-generational households with tie-break rules involved as to which taxpayer is entitled to claim which children. Issues of parental incarceration, domestic violence orders, removal by CPE, foster care arrangements, court-ordered changes of custody, etc. can make things very complicated.
We regularly get CPAs/retired CPAs who volunteer. Early in their training they are very confident (some cocky). As training progresses and into the early parts of the first season of actual prep they often struggle and some will quietly admit that it is harder than they expected. A typical response is "we never see returns like this in practice."

Many of them also struggle with the person-to-person contact before and while they are doing their work having worked in an environment where often the paperwork is dropped off, there is minimal personal interaction and follow-up is frequently on the phone.

And, of course, there are always some who want to paint outside the lines with respect to scope.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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TexasPE
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Re: Tax Preparation Fees

Post by TexasPE »

Retired engineer here. I'm a VITA volunteer also. I recommend that anyone hesitant about doing his/her taxes take the free VITA training. It makes no assumptions about the learner's financial literacy. VITA has Basic and Advanced levels. Achieving Basic level (3-4 hours, can be done on-line) qualifies the individual to complete simple returns. The Advanced level (another 3-4 hours) covers more complex topics.

The software used is TaxSlayer, which is also available to the public. As with other commercial programs, it uses an interview format to help the user make decisions. VITA has an on-line 'sandbox' so that the volunteer can create practice returns. As others mentioned, I find it satisfying to see lower income people keep the $200+ for tax prep in their pocket.

Google 'VITA near me' for training locations, access.
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barcharcraz
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Re: Tax Preparation Fees

Post by barcharcraz »

The IRS has a free online program called "FreeFile Fillable Forms" (a fun name). It's distinct from "free file" and is open to taxpayers of any income level. It can be used to file almost arbitrarily complex tax returns: S-Corp, schedule-ks, LLCs, partnerships, farmers, the works. I don't think it can be used to file C-Corp taxes but otherwise it's the works.

It's a simple online version of the forms that has a button to "do the math" and inline links to attach additional forms (you can also pick from a list). Once your done with a form it will fill the "results" in for you as well. I think it has improved somewhat this year.

This allows you to efile and is 100% free, for every US tax payer, of any income. I've used it for a few years and it's a crime that so few know it even exists.
gips
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Re: Tax Preparation Fees

Post by gips »

We pay $500, the last two years I checked our preparers returns with a free tax prep program and it (or I) get it wrong every year to the tune of more than her fee. Our preparer is senior staff at a top accounting firm and does tax prep part time as a side gig so I’m thinking she is correct.
tibbitts
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Re: Tax Preparation Fees

Post by tibbitts »

gips wrote: Sat Mar 30, 2024 12:30 pm We pay $500, the last two years I checked our preparers returns with a free tax prep program and it (or I) get it wrong every year to the tune of more than her fee. Our preparer is senior staff at a top accounting firm and does tax prep part time as a side gig so I’m thinking she is correct.
Where did the returns diverge?
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FiveK
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Re: Tax Preparation Fees

Post by FiveK »

dodecahedron wrote: Sat Mar 30, 2024 9:17 am VITA sites are funded by IRS grant funding, subject to Congressional appropriation, explicitly designed to support low-income taxpayers. We are allowed to make occasional exceptions....

Edited to add: In practice, our VITA site (located in a very high poverty neighborhood) has its hands more than full trying to serve as many low and moderate income taxpayers as possible, and I have found taxpayers with higher incomes very gracious and understanding and respectful of our income limits. In 20 years of operation, nobody with an income over our limit has ever “made a stink” about our income limits, and I do tell them that there are nearby AARP sites without income limits that may be available to assist them.
All the above matches my understanding also: that the legal language is "low to moderate" but nothing in the law specifies an exact number - thus the word "generally" on the Free tax return preparation for qualifying taxpayers page. The guideline (cue Pirates of the Caribbean meme) that has been used is approximately the maximum AGI MFJ filers can have and still qualify for the EITC.

It would be unfortunate if other VITA site leaders don't exercise the judgment you describe in making the occasional exception.

As it says in https://www.irs.gov/pub/irs-pdf/p4671.pdf:
Customers Served – VITA programs that receive a VITA grant must primarily serve low-to-moderate-income
taxpayers. At least 90 percent of individuals served must not exceed the maximum income limits for Earned Income
Tax Credit (EITC) eligibility for the tax year. VITA grant recipients may provide tax preparation assistance to some
taxpayers with income in excess of this annual Adjusted Gross Income (AGI) limitation without jeopardizing their
grantee status.
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snackdog
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Re: Tax Preparation Fees

Post by snackdog »

I pay $1000 for fed plus four state returns, about 150 pages. I don't need the aggravation. If we eliminate all rentals and reduce to just investments and one state, I'll do it myself. I do my dad's returns.
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drzzzzz
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Re: Tax Preparation Fees

Post by drzzzzz »

mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
Same for our site - it's at a senior center and they do the scheduling for us so most of the returns are seniors with limited income. However, we will do anyone and any income as long as within scope of what AARP TaxAide allows.
jebmke
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Re: Tax Preparation Fees

Post by jebmke »

drzzzzz wrote: Sat Mar 30, 2024 4:00 pm
mjg wrote: Thu Mar 28, 2024 3:45 pm
jebmke wrote: Thu Mar 28, 2024 3:35 pm
FiveK wrote: Wed Mar 27, 2024 8:33 pm
arcticpineapplecorp. wrote: Wed Mar 27, 2024 7:59 pm If your niece's income is under the limit....
Technically there is no specific income limit for either VITA or Tax-Aide, nor is there any age limit. The Free tax return preparation for qualifying taxpayers page says "'generally' make $64,000 or less" as a suggestion for what "low to moderate" income means. Many VITA sites do use the $64K as a limit, and people generally accept it, but if someone wanted to make a stink about it the site wouldn't have a legal leg to stand on.

One would hope, however, that people with six-figure incomes aren't using those sites to save what to them is a relatively small fee, thus displacing someone for whom the fee would be significant. But both of the OP's examples (unless the pension/W-2 amounts are huge) should be good fits.
I believe Vita sites are allowed to set income caps but TaxAide is not. I know a Vita site near me has a hard cap at $60K.
I'm a VITA volunteer tax preparer and our site has no income limit. It's a simple in-scope /out-of-scope decision as to whether we will prepare the return.
Same for our site - it's at a senior center and they do the scheduling for us so most of the returns are seniors with limited income. However, we will do anyone and any income as long as within scope of what AARP TaxAide allows.
Right, Taxaide policy precludes an income limit. VITA does not.
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gch
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Re: Tax Preparation Fees

Post by gch »

I pay $500 for my personal and then between $400-600 for each of the four business LLC accounts (including distributing K-1’s). It’s money well spent if you can find someone you trust in my opinion.
gips
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Re: Tax Preparation Fees

Post by gips »

tibbitts wrote: Sat Mar 30, 2024 12:32 pm
gips wrote: Sat Mar 30, 2024 12:30 pm We pay $500, the last two years I checked our preparers returns with a free tax prep program and it (or I) get it wrong every year to the tune of more than her fee. Our preparer is senior staff at a top accounting firm and does tax prep part time as a side gig so I’m thinking she is correct.
Where did the returns diverge?
I did a roth conversion, the software prompts for a nys pension and annuity exclusion, reading the software hints and the form's instructions, I'd never have guessed we were eligible for a $20k exclusion:

https://www.tax.ny.gov/pdf/volunteer/ty2018/co-60.pdf

the exclusion paid her fee x 3

best,
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