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What are the Different Types of Income Tax Preparation Services?

Article Details
  • Written By: K. Testa
  • Edited By: Michelle Arevalo
  • Last Modified Date: 19 March 2018
  • Copyright Protected:
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    Conjecture Corporation
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There are many income tax preparation services that can help someone file a return. A person can do it himself, by mail, or through electronic filing. This is a popular option for people whose returns are so straightforward that they can organize and submit the information themselves. While some people use tax preparation software, they can also hire people to prepare, or review, their tax returns. Many people in the U.S., including some low-income individuals, senior citizens, and military personnel, are eligible for free tax assistance. When utilizing income tax preparation services, it is usually important to choose a reputable individual or business.

People who want to file their own tax returns online have numerous options. In the U.S., the Internal Revenue Service (IRS) website provides helpful filing information, as well as links to free tax software, through its Free File program. This applies specifically to federal returns, so people filing state returns usually must check the guidelines for filing in each state. Some people prefer to purchase their own tax preparation software and keep detailed records on their home computers. They can still file their returns electronically, or may opt to mail their returns.

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Several business franchises in the U.S. and Canada provide income tax preparation services. A number of them utilize some combination of in-person consultation and online filing or support. It is generally free for someone to file his return on his own. When using software or services offered by the commercial tax preparation services, however, there are usually fees involved.

In addition to tax return review, income tax preparation services can often provide audit assistance. Furthermore, when someone is eligible for a tax refund, he or she might be able to receive the money sooner by taking advantage of a refund loan. In this scenario, the customer receives a payment in anticipation of his or her refund, often in the form of a check. Then, his or her actual refund is paid directly to the tax preparation company. Taxpayers are usually advised to investigate potential interest rates and other loan conditions before committing to such an arrangement.

Some people are eligible for free income tax preparation services, many of which are completed by volunteers. When using these services, people usually still have the option to file electronically or on paper. The IRS offers a Volunteer Income Tax Assistance Program (VITA) and a Tax Counseling for the Elderly (TCE) Program. The VITA Program is available to individuals with low or moderate incomes, and the services are usually available at community venues like shopping malls and libraries. The TCE Program assists senior citizens, typically persons age 60 or older. In addition, military service people are also eligible for certain VITA services. They can take advantage of these services whether they are at home or based in another country.

As with any service that is advertised as being free of charge, individuals should be careful when dealing with any companies that offer free income tax preparation services. It might help to verify whether they are actually certified volunteers who have been trained in tax preparation. Otherwise, one could be subject to fraudulent practices or costly errors. Regardless of who prepares one’s income tax return, the individual whose name is on the document is ultimately responsible for the information that is submitted.

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