The tax filing season can be a stressful time for many individuals, especially as the deadline approaches and the complexities of the tax code become more apparent. However, this year, taxpayers may face an additional challenge – higher tax filing costs that could take a bite out of their refund. With changes to both federal and state tax laws, the process of preparing and filing taxes has become more intricate, leading to increased expenses for taxpayers.
One of the key factors contributing to these higher costs is the rise in tax preparer fees. As tax laws become more intricate, the need for professional assistance has increased, and tax preparers have adjusted their fees accordingly. According to a recent study, the average cost of preparing and filing a federal tax return with itemized deductions increased by over 6% compared to last year. For individuals who opt for a professional tax preparer, this rise in fees can significantly impact the amount of their refund.
Another aspect to consider is the impact of recent changes to the tax code. The Tax Cuts and Jobs Act, implemented in 2017, brought about several modifications to deductions, exemptions, and credits. These changes have made the tax filing process more complex for many individuals. As a result, taxpayers may need to spend more time gathering documentation, researching applicable deductions, and ensuring compliance with the new laws. The additional time and effort required can translate into higher costs if individuals choose to seek professional assistance instead of navigating the process themselves.
Furthermore, the increase in tax filing costs is not limited to federal taxes alone. Many states have altered their tax laws to align with the changes implemented at the federal level. In some cases, states have even introduced their own unique tax provisions, further adding to the complexity of the tax filing process. As a result, taxpayers may find themselves facing additional expenses when it comes to preparing and filing their state tax returns.
Although higher tax filing costs may seem like a significant burden, there are steps that individuals can take to mitigate these expenses. One option is to become more familiar with the tax code and attempt to prepare and file returns independently using online software. While this may require additional time and effort, it can significantly reduce expenses associated with professional tax preparers.
Additionally, staying informed about changes to the tax code and seeking free resources such as the Internal Revenue Service’s website can facilitate a better understanding of applicable deductions, exemptions, and credits. By being proactive and informed, individuals can potentially minimize the need for costly professional assistance.
In conclusion, higher tax filing costs are becoming a reality for many taxpayers. With changes to the tax code and the need for professional assistance, individuals may find that their refund is diminished as a result of increased expenses. However, by taking advantage of free resources, becoming familiar with the tax code, and considering self-preparation options, individuals can work towards minimizing these costs and ultimately maximizing their refund.
