Getting a break 5 ways to trim your tax-prep costs this year
As millions of Americans embark on the annual ritual of tax preparation this year, many will buy tax software or hire human tax preparers — and it probably won’t be cheap. Tax software can easily run $100 or more for many people, and human tax pros charge $203 on average to do a tax return, according to data from the National Association of Tax Professionals.
But there are ways to cut the cost of tax preparation, or even get it for free.
1 . See if you qualify for Free File
According to Nerdwallet’s 2021 tax study, of $72,000 or less can get free tax software from Intuit, Taxact, Taxslayer and other companies through the IRS Free File program.
• How to get it: Irs.gov.
2 . Look for freebies on tax software websites
Tax software companies typically charge for their software, but many also offer a free version for people with simple tax returns. Each company’s definition of “simple” can vary, but in general, the free options are for people who don’t plan to itemize deductions and whose sources of income are mostly jobrelated rather than from investments, businesses or other means.
• How to get it: Tax software providers’ websites.
3. Ask for a discount
If you want to hire a human to prepare your tax return, you don’t necessarily have to pay the $203 average fee. Most tax pros offer discounts. According to the NATP, almost half of tax pros (46%) give breaks to clients’ family members, 40% reduce prices for students and 29% shrink the bill for senior citizens. Many tax pros also offer discounts to new clients, returning customers or people such as veterans, police or clergy members, according to the survey.
• How to get it: Raise the topic with your tax preparer.
4 . Find free tax clinics in your community
Federal grant programs fund free Volunteer Income Tax Assistance clinics across the country for people with disabilities, language barriers or incomes of $57,000 or less. There are also free Tax Counseling for the Elderly clinics aimed at those aged 60 or older, as well as free help through the Department of Defense Miltax program for active-duty military and some veterans. These clinics op-
erate through a variety of community organizations in all 50 states. (Due to COVID-19, some sites may be closed, and others may be drop-off or virtual only.) How to get it: Search irs. treasury.gov/freetaxprep or militaryonesource.mil for a local clinic.
5 . DIY some of the other stuff
You don’t have to pay someone to find out how much you owe the IRS or get copies of old tax records; you can request that information directly from the IRS online. You can also get a filing extension for free by filing the one-page IRS Form 4868 and getting it to the IRS by April
15. And if you can’t pay your tax bill in full by the April 15 deadline, you can apply for an installment payment plan or even apply for an offer in compromise to settle your tax debt.
• How to get it: Irs.gov.