How do I Avoid Tax Return Fees?

Paying taxes to national or local governments is an almost universal obligation, although each jurisdiction has different tax return filing and payment schemes. The best way to avoid tax return fees is to follow your taxation authority’s instructions exactly, ensure that filings are made before the deadline, and file your return without the help of a fee-based professional. Taxes typically cost nothing to file, but fees will apply to late filings. Most taxation authorities also penalize even inadvertent filing errors and miscalculations with fees. Hiring a tax preparation expert to manage your filing can help to minimize the chance of inadvertent error, but professional services usually come with tax return fees all their own.

In most European countries, taxation authorities simply send tax payers a bill, and the amount owed must be submitted — or refuted — within a certain amount of time. Citizens of other countries, including the United States, must individually prepare and file tax returns by a nationally-mandated deadline to avoid tax return late fees. The first and easiest way to avoid tax return fees is to ensure that all required paperwork has been filled out and submitted by the specified tax return deadline.

In the United States, tax payers must pay attention to both the required federal tax return as well as their individual state tax return. Taxpayers who file federal taxes but fail to remit tax filings to their state government, and vice versa, are usually subject to steep fees. Although both state and federal taxes are based on the same set of paperwork, they are separate in both form and function.

Depending on the complexity of the required filings, accuracy can also be a significant concern. Even the simplest of returns requires double-checking. Filing a tax return with errors as simple as a misspelled name or a wrongly entered tax identification number can lead to processing delays and penalty fees. Omitted information and overt misrepresentation can also open taxpayers up to significant tax return fees and, in some circumstances, jail time.

The fear of preparing a tax return incorrectly or incompletely leads many taxpayers to seek professional tax return advice. This advice is rarely free, however. Another way to avoid or at least reduce tax return fees is to either not use professional services, or look for a professional who provides hourly advice or low-cost preparation services. It is important to get the help that you need with your preparation, but paying for services and features that are not really needed can add up quickly. Many tax preparation plans bundle services like investment income calculations, mortgage deduction searches, and management of status changes, which are not relevant to all taxpayers. It is worth asking whether a tax professional is willing to pro-rate services based only on what you need, or if there is a possibility for guidance without full preparation.