Dustin provided a case study in why it’s a good idea to attempt to do your taxes on your own before shelling out money for professional help. And at that point, it’s smart to get an estimate about how much services will cost. After going through an hour of hassle and spending $250, he discovered he could have saved himself time and money by going it alone.
He writes:
Like many Americans 2010 was a bad year for me. I lost my Job and had to go on unemployment, and I am also a full time student. After I lost my job I chose to take my 401K distribution as I wanted to wait as long as possible before having to apply for unemployment. When I sat down to do my taxes I had 4 different forms to enter, one W-2, a form for my 401(k) distribution, one for school, and one for unemployment. I went to H&R block’s website and tried to enter the information as best I could and realized I was getting a pretty good sum back from Federal.Since this is the first time I have had this many forms, and I had never gotten this much back from taxes I decided to set up an appointment with one of H&R Block’s “Tax Specialists” just to make sure it was correct. The first sign of trouble was that I was having to correct my rep multiple times, as she didn’t seem to be reading my forms correctly. H&R block has a shady practice of telling you how much you have to pay them right after you finish inputting information about your state taxes, so when we got to that part I thought she was telling me how much state tax I owe. The amount didn’t seem weird because I have always had to pay Arizona money on my taxes.
After this she asked if I wanted to pay by check or have it deducted from my Federal refund, which I said check (still thinking we were talking about my state tax). After realizing she had submitted my taxes I asked how much her services were going to cost. I was dumbfounded to hear her tell me it would be $211, considering I had helped her fill out a lot of the form myself. I told her I don’t have $211 (being that I am still unemployed) and I would rather file online, since I got the same results on my own for free, to which she replied “I’ve already submitted your taxes, it cannot be canceled.” We ended up setting it so that they would deduct their fees from my federal return which they charged me an extra $39 to do. All in all, I ended up paying $250 to spend an hour of my time doing something I could have done online for free. It wasn’t until after everything was said and done that I remembered H&R Block’s satisfaction guarantee that you will be satisfied or you don’t pay. Well, I told her I was unsatisfied but apparently I still had to pay.
What’s the most you’ve spent to do your taxes?
Previously: How To Get Free Tax-Prep Help
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My fiancee had used H&R Block for years, so when we got married I agreed to try them for our joint earnings plus my consultancy. The preparer had the wrong idea of the max contribution to a SEP IRA, and tried to shoehorn her wrong idea into the Block software system, upon which everything at Block depends. Separately, she failed to enter crucial estimated tax info into the software, which wrongly calculated that I owed several hundred dollars plus a penalty, which I dutifully paid. When I figured out what went wrong and tried to explain it to the preparer, she got all pissy. The management was only able to try making manual corrections in their software, which only generated another buggy return. I ended up having to re-do my taxes manually, with some friendly advice from a local CPA who is now our tax preparer. The bill from Block was over $600; our CPA charges HALF that for a far superior job. NEVER AGAIN.
Estimate? Yeah right. They’ll tell you that it is nearly impossible to give you an estimate because every person is different. lol.
Ex Liberty Tax preparer here. I’m not sure if this was mentioned by someone else but I doubt they would submit your tax return immediately. Returns usually go through a review before they are transmitted. They are only transmitted once they are paid for. She was running game.
I’ve been using TaxSlayer the past three years. It is pretty much the only one that doesn’t charge an arm and a leg for extra state returns. My wife works in Georgia, but we live in South Carolina, so we have to file in both states. Taxslayer charges $9.95 for Federal, and $4.95 for each state. This is pretty low compared to the $21+ that other online tax websites charge for each state return, not including the charge for the Federal filing. It has all the new forms, and includes the same features as every other preparer.
I think that we are missing the point here. Why should we have to pay anyone to obey the law (that is, pay our taxes?) Do we have to pay anyone to ensure that we don’t rob a bank? In Japan no one files a tax return unless you have overpaid due to changing your job, etc. Just think-if the tax laws were as they should be the IRS would be 1/10th the size it is now, taxes would be fairer for everyone, our deficits would be non-existent, business would know their tax costs, there would be no “loopholes” for the privileged few, fewer people would be going to jail for tax evasion ala Wesley Snipes, it would be easier for the government to build a case against those that do avoid paying their taxes, the list could go on and on. But then again-where could our royalty (elected officials) get their money?
I’m down with a federal sales tax! but then again I’d lose out.. I gain money @ tax time.
I do my own taxes at home. On paper. For free. Really. It’s not that hard. Ok, it’s not free, it costs a few dollars for registered mail.
I had my pretty straightforward taxes done for me once… I went to see someone, paid them $60 and then watched him/her fill out all the information in software. He told me that the next year the price would be more (Kid on the way, Plus a House) I opted to go the DIY online route and it was pretty much the same experience.
My Brother Decied to go to H&R a few years ago as he had income in multiple states and multiple W-2′s.. he ended up paying around $150 for the services.. AND he decided to do the refund anticipation loan at something like 25% interest or something ungodly like that. NEVER TAKE THE REFUND LOAN!!!
H&R sucks – the one time I used them, they told me things weren’t deductible that were, costing me over $1000 of refund. They also lost all my paperwork somehow. I always recommend against them now.
Seems like this guy should’ve paid attention.
I’ve used Tax Slayer online now for the past 5 years. A family member charged us $400 one year for 3 W-2′s and a 1099. I had three states to file returns in. My understanding is that a lot of CPA firms rent the software for these returns on a “per use” basis.
Tax Slayer costs me about $15 bucks for the middle program, and I think it’s about $20 for the program with all the bells and whistles. That includes e-filing. I almost always get my return back in about 8 days.
There are some other programs out there that cost less I think, particularly for members of the military, however, I’ll stay with what has worked for me.