Tax day 2012 is fast approaching. If you haven’t filed your tax return yet, chances are you owe the Internal Revenue Service.
But putting off your annual tax task could cost you more in higher tax preparation costs, too.
A survey by TechBargains.com found that tax-filling procrastinators pay nearly double to complete their forms than do those who send in their taxes in January and February.
On average, Americans spend $114 on tax preparation, according to the survey. Breaking it down, TechBargains found that the average cost of tax preparation software is $54, filing via a tax prep website is $60 and the average price to hire an accountant is $266.
But procrastinators, defined as individuals who file in April or get an extension to submit their 1040s, tend to pay an average of $163. Early filers, however, pay an average of just $87, according to the data collected by the electronics products aggregation website.
So why does it cost more to get tax help later in the filing season?
The survey shows that about a third of late filers use accountants, which is the most expensive filing method. And I’ve found that the simple law of supply and demand applies to professional tax help, too.
A lot of tax pros I know don’t accept new clients after a certain date, for example, March 1. They have plenty of paying customers and a limited time to complete all their returns.
Others will accept new customers, but will charge more to help late arrivals. Again, the reason is that it means more work on a compressed timetable.
What about tax software? Early in the filing season when everyone is considering how to file, many companies offer special deals to keep previous customers and snatch new ones from competitors. Sure, there are discounts and coupons for tax-prep programs throughout filing season, but the prime discount period appears to be earlier in the year.
And, say TechBargain pollsters, the 40 percent of late filers who use tax software are rushed and may not be seeking out deals.
Of course, if you’ve put off filing and then realize you need help to get your 1040 done, you’re kind of stuck paying whatever it takes.
Or you could file for an extension and find a tax professional – and possibly a lower fee — after the April filing crush passes.
Just remember, you’ll need to send the IRS a close estimate of any tax you figure you’ll owe. An extension gives you extra time to send in the forms, not more time to pay what you owe.
Have you filed your taxes yet? Do you expect to get it done by April 17? How did you or how do you plan to complete your taxes? What would make you consider hiring an accountant or other tax professional?
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