Virtual Tax Preparation: What To Know

Tax season has arrived again. With tax season in full swing amid a pandemic, virtual tax preparation is poised to become a popular option this year.

Many Americans can save money by choosing to file their taxes themselves or with the help of affordable tax preparation software. But in a complicated tax situation, you might feel more comfortable working with a tax preparer. That’s when virtual tax preparation can come in handy.

Before you dive into virtual tax preparation, let’s take a closer look at everything you need to know about it.

What Is Virtual Tax Preparation?

Virtual tax preparation is when you work with a tax preparer on your tax returns without meeting in-person. Although the tax preparer you hire will likely offer the opportunity to discuss the details of your unique tax situation in more detail, a face to face meeting won’t be required. 

With this type of tax preparation, you won’t have to drag all of your sensitive financial information across town. Instead, you can send over your documents with the comfort of a remote arrangement (usually via an online dropbox-type service). 

Typically, at the end of a virtual tax preparation arrangement, you will have the opportunity to review your returns. Once you are satisfied and grant permission, the tax preparer can file your taxes for you. 

Benefits Of Virtual Tax Preparation

Whether you don’t have the time to handle your tax return or are uncomfortable with filing your taxes, a tax preparer can help you finalize your tax return documents quickly. 

Tax preparation can be especially useful if you have a complicated financial situation. For example, with multiple rental properties and your own business, the help of a professional tax expert may be well worth the cost. 

If you are seeking tax preparation help, then going with the virtual option could save you time and energy. Gathering your documents for a local meeting can be a time-consuming undertaking. Instead, you can simply send your documents and field any questions about the paperwork from the comfort of your home (and at any time of day). 

A virtual tax preparation process can pave the way for a smooth experience to check this item off your financial to-do list. 

Disadvantages Of Virtual Tax Preparation

The drawbacks of virtual tax preparation line up with the negative aspects of any style of tax preparation. 

A big disadvantage is the cost of tax preparation. In most cases, you’ll have to pay a few hundred dollars to work with a tax preparer. Although the exact cost will depend on your situation, you could easily save that money by using free tax preparation software (which H&R Block is also one of our top picks). 

With some virtual services, you may not know who your tax preparer is ahead of time, and how much experience they have. With that, it is important to do your due diligence on potential tax preparers before making your choice. Consider how much experience they have before moving forward. If you are interested in H&R Block, their tax pros also have an average of 10 years of experience.

Finally, virtual tax preparation misses an opportunity to provide an in-person experience. If you prefer to sit down with your tax preparer in a brick-and-mortar setting to discuss your options, then this is not the right fit for you. With H&R Block, you can start one way and finish another. So, you can drop your docs off and meet face to face, then answer questions, review and approve the return online.

Things To Look For In Virtual Tax Preparation

With more of the world getting comfortable doing business from home, it is not surprising that tax preparers are offering a virtual option. Here are some things to look for:

Working with a virtual tax preparer can be a good option, but taking the time to find the right tax preparer for you is critical. 

Should You Pay For Tax Preparation?

Although it is completely possible to file your taxes for free, many of us feel uncomfortable about taking the DIY route. With so many mixed feelings about money floating around society, it is understandable that many would want to take the option of working with a qualified tax preparer. 

However, going with the DIY option is typically a good idea for simple tax situations. Let’s say you are working a W-2 job without additional streams of income. In that case, filing your taxes could easily be done for free.

Note: You can compare the top free tax software options today.

But if you own your own business and have several income streams, then seeking the help of a tax professional could be a great idea. A tax professional with the specialized skills you are looking for could help you with tax planning and provide peace of mind. 

Which Companies Offer Virtual Tax Preparation?

It used to be very rare that you could get virtual tax prep. But that all changed with the pandemic, and now most major providers offer some form of virtual tax preparation:

TurboTax Full Service: TurboTax offers full service virtual tax preparation as well. However, their prices are a bit higher than some of the other services. Read our full TurboTax Full Service review here.

H&R Block Tax Pro: H&R Block allows you to upload all your tax documents online and then have a tax professional prepare your return. Learn more in our H&R Block review.

Final Thoughts

Virtual tax preparation can be an ideal choice for individuals with complicated tax situations. If you plan to forgo the DIY tax route, virtual tax preparation could save you time and money as you navigate this year’s tax season.