The IRS estimates it takes individuals 11 hours to prepare a tax return on average. But who wants to waste their time sifting through receipts and bank statements, calculating how much money they owe to the government?
In 2021, more and more business owners are hiring a tax professional to do their taxes. But how much does this service actually cost? In this article, we examine the average cost of professional tax preparation services, discuss tax prep software, and consider the benefits of working with a professional tax expert like Tax Savvy Jessica.
How Much Does Professional Tax Prep Cost?
According to a survey released by the National Society of Accountants, the average cost of a basic, professionally-prepared W-2 tax return is $220.
But for self-employed coaches and consultants, the cost will be higher due to the more complex nature of filing a self-employed tax return. While a salary-based employee may simply need to file a W-2, a self-employed individual will need to use Schedule C (Form 1040) to report profits and losses, as well as Schedule SE (form 1040 or 1040-SR) to report Social Security and Medicare taxes. And depending on your tax situation, you may need to file even more forms, like rental income, medical expense deductions, or investment income.
The national average for basic professional tax prep services for the self-employed is around $300, although this number can vary significantly depending on your location and the complexity of your tax situation.
Should I Buy Tax Prep Software Instead?
Services like H&R Block and TurboTax offer an affordable way to file your taxes. On average, these cost around $150 to file a self-employed tax return. But while using tax prep software can undoubtedly be a cheaper alternative to hiring a professional, there are a few issues to be considered:
- Software isn’t nuanced. Sure, TurboTax can calculate your cut to Uncle Sam, but it can’t advise you on detailed tax strategies like how to save for your child’s education or how to handle charitable donations. Plus, tax professionals use software that’s significantly more advanced than consumer tax products. Professional tax software can quickly scan financial information for errors, saving time and reducing the risk of getting audited.
– - Software can’t handle complex tax returns efficiently. Self-employed taxes are much more complicated than an average W-2 tax return. To maximize savings and reduce the risk of errors, hiring a professional is a better option.
– - Software can’t answer your questions. If you’re sitting at your computer trying to figure out if a specific purchase can be itemized, the computer can’t do much to help. But having a tax pro on speed dial means getting a fast answer to your question, saving you time, stress, and hassle.
Advantages of Hiring a Tax Pro
When you hire a tax expert to manage your taxes, you have more time to focus on what really matters to you, whether that’s growing your business, spending more time with your family, or planning that vacation you’ve been dreaming of for years.
You’ll usually come out ahead financially, too. Although hiring a tax pro might cost more up front, you’ll likely save money on hidden deductions that you wouldn’t have discovered without the help of an expert.
How Much Does It Cost to Work With Tax Savvy Jessica?
We offer 3 tax packages to our clients: The Startup, The Entrepreneur, and The CEO.
The Startup
For the business owner earning between $5k – $8k per month
- Income tax preparation (business and personal)
- Annual year-end tax review
- Basic tax strategies
- Email support
- IRS letter review
- Client resource vault
- Tax Deadline Reminders
- 24/7 access to secure cloud portal
- Video & screencast communication
The Entrepreneur
- Income tax preparation (business and personal)
- Mid-year and year-end tax review
- Premium tax strategies
- Year-end financial planning review
- Phone and email support
- IRS letter review
- Client resource vault
- Tax Deadline Reminders
- 24/7 access to secure cloud portal
- Video & screencast communication
The CEO
- Income tax preparation (business and personal)
- Quarterly tax review
- Elite tax strategies
- Mid-year and year-end financial planning review
- Priority phone and email support
- IRS letter review and respond
- Client resource vault
- Tax Deadline Reminders
- 24/7 access to secure cloud portal
- Video & screencast communication
Ready to become a tax savvy business owner? Complete the form below to get started!
