April 15^th roles around and the sale of antacids in the US has peaked for the year as millions sweat their income taxes.  Many people try to reduce the tension by hiring income tax preparation firms such as Jackson Hewitt and H&R Block to stand between them and the IRS.  The cost of even the most basic tax preparation by tax preparation firms runs $200 and goes way up from there.  You can easily save most of that.

For the simplest form– estimated by the IRS The average time and expenses required to complete and file Form 1040EZ will vary depending on individual circumstances. The estimated averages are 8.3 to 13.1 hours including recordkeeping time.

Tax preparation software is becoming better and better.  Expect to spend anywhere between $35 and $90 for programs that will do just about everything your CPA does.  In fact, you have an advantage because the programs can lead you through a detailed interview to make sure you are covering the bases on what to pay and what to claim.  This can save you money.  Anyway, the last time we had an accountant do our taxes we had to fill out all the interview forms and they just fed the information into their computer program.  Now we only use the CPA to handle any complicated questions or grey areas.  We are saving over $350 a year.

I watch the newspaper sales fliers leading up to tax time and find the tax preparation software packages on sale. 

We are partial to Intuit TurboTax because it includes ItsDeductable which is a program that helps you calculate the value of charitable donations that have been made.

Reviews have given an edge to Intuit's TurboTax over H&R Block's TaxCut, saying TurboTax has a slightly better user interface and a more thorough interview process. If your return is straightforward, you might not notice a big difference between the two but overall, reviews say TurboTax is easier to use, with less wasted effort. Those with complicated returns are better off with TurboTax Premier, which offers better features for those who need to file a Schedule C, and for those with more complex capital gains, business depreciation, mortgage refinancing or rental income. TurboTax Premier also lets small-business owners complete W-2 and 1099 forms for employees, a feature missing in TaxCut Premium.

If your adjusted gross income is less than $50,000, you will probably be eligible to complete and e-file your federal taxes for free starting at this link. As with other free tax-preparation software, preparing and e-filing a state return costs extra.

If you use one of the tax preparation firms say “No,” when they offer you to pay you your refund in advance (refund anticipation loan).  That is nothing more than a loan at exorbitantly high cost.  If you need your money, file as early as you can with e-filing and you’ll see you’re check sooner.  Then adjust your withholding so it matches your expected obligations for next year.

As always, it is wise to consult with the IRS help line or a licensed tax professional if you have any questions about tax regulations.  It is, of course, wise to comply with the law at all times.  Be careful for tax preparation firms that might encourage you to stretch the truth to maximize your tax return.  You’re the one who carries the ultimate responsibility.