Saturday, December 27, 2014

Follow us:
Follow @NY1 on Twitter Follow NY1 News on Facebook Follow NY1 News on Google+ Subscribe to this news feed 


How to Choose the Right Tax Prep Service

  • Text size: + -
TWC News: How to Choose the Right Tax Prep Service
Play now

Time Warner Cable video customers:
Sign in with your TWC ID to access our video clips.

out of 10

Free Video Views Remaining

To get you to the stories you care about, we are offering everyone 10 video views per month.

Access to our video is always free for Time Warner Cable video customers who login with their TWC ID.

  To view our videos, you need to
enable JavaScript. Learn how.
install Adobe Flash 9 or above. Install now.

Then come back here and refresh the page.

With the tax deadline exactly six weeks away, our Money Matters Report will spend the entire month of March focused solely on what you need to know to file, starting with looking at how much it costs to go with a pro. NY1's Tara Lynn Wagner filed the following report.

If you normally pay someone to prepare your taxes, be prepared to spend a little more this year.

"We're seeing on average tax prep fees increase about 5 to 6 percent," says Ryan Himmel, founder of BIDaWIZ, which is both an online database of tax information and a directory of financial professionals.

This year, Himmel says a simple return with standard deductions will run you $152 on average, up from $143 last year. Itemizing bumps the bill up to $261, and from there, the numbers keep climbing.

"If you're expecting to have some realized gains this year, you have to pay an additional $150 to file a schedule D form. And then, of course, if you have a business tax return and you need to file a schedule C or 1065 or 1120, it can be upwards of $500 to $800," Himmel says.

If that answer was enough to make your head spin, then hiring a pro is probably a good idea. Start by asking friends and family members for recommendations.

"You want to make sure that whoever you're choosing is a reputable person. You're giving them all of your personal information - your social security number, your income information, where you work - so you want to be able to trust that person," says Peggy Riley, an IRS spokesperson.

You also want to make sure it's someone you can reach after April 15 just in case there's a mistake or an audit. Also, ask about pricing up front, and make sure they're clear about what that includes.

Finally, there are warning signs. If someone immediately promises they'll get you a huge refund, Alba Pico of the New York City Department of Consumer Affairs says, "That's a big flag, because they haven't really seen your paperwork or they don't know that much information from you to make that decision."

Riley also warns to never sign a blank return. Also, since you're the one who is ultimately responsible, not the preparer, double-check their work and make sure that everything they list is legit.

"Obviously, if you don't have dependents, don't let them claim dependents for you. There's differences between just a simple mistake versus fraud. Anybody can make a mistake. The tax law is complicated. Mistakes happen all the time, but you want to make sure that at least you're not doing anything fraudulent," says Riley.

For more information on choosing a preparer, visit ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP