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Why tax preparation cost isn’t the only consideration

You can get quotes and compare costs, but bear in mind that cost is not the only consideration. Here are some other things to think through:

Your time.
Let’s say you can save $50 by doing your taxes yourself. What you have to ask yourself is how long it will take you to complete your returns and how you value your time. You might well find that the value of your time exceeds, or at least significantly offsets, the cost of paying to have your taxes done.
The risk of over-paying.
Tax laws change all the time, impacting credits, deductions, and different options for treating income and investments. Missing just one potentially tax-saving new wrinkle could cost you a multiple of what you would save by doing the returns yourself.
Possible fines for mistakes.
For individual and estate tax returns during the 2014 fiscal year, the IRS assessed more than 31 million penalties, totaling just over $13 billion in value. Clearly, it is all too easy to make a very costly mistake in preparing returns.
Legal consequences for misleading returns.
Beyond monetary penalties, particularly serious tax violations result in criminal prosecutions. When this happens, the IRS secures a conviction in the majority of cases it investigates, and nearly 80 percent of those convicted do jail time.

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