First, if you qualify, I highly recommend using a Volunteer Income Tax Assistance (VITA) site where you can have your taxes prepared for FREE. The Tax Preparers are volunteers who have passes a rigorous certification program and know what tax credits to look for. If you have a bank account, you can get your return directly deposited into your bank account in a few days. You can even jump start your savings goal by purchasing a savings bond with your return, or a portion of it. Check out VITA sites in Maryland through a client of mine, MD CASH Campaign.
If however, you do not qualify for the VITA sites, you have to decide whether or not to do your own taxes or hire someone. If you choose to hire a tax preparer, some states require them to have a license, so start with looking for the license first. Get references from friends and family and compare pricing from 2-3 preparers. I received a surprise last year from a CPA who quoted me one price for the taxes but gave me a bill for $200 more than the quote--certainly resulting in my not using that one again. I chose to use a CPA because I am a consultant and felt that doing my own taxes would be above my level of tax expertise. I also detest that box in the corner of various tax software that goes up and down with the amount that I owe or am due a refund--usually a very tense and stressful process until the number is finalized. However, after doing some research this year, I don't feel it was worth the price--original quote or inflated end cost--of using a paid tax preparer and am up to the challenge of DIYT (Do It Yourself Taxes).
I started with the easiest--our daughters tax return. She's a college student who earned a meager amount but did pay federal and state taxes. I used the free IRS efile site from TaxAct and found it pretty straight forward and easy to understand. The one question I couldn't find the answer to on TaxAct, I found on the IRS website. Total cost for hers was $14.95 because I paid to have the state filing prepared by TaxAct--I could have saved that money by going to our state website and filing there but felt $15 was worth it to not re-enter in the information. My husband and I have spent 90 minutes and are almost done with our taxes through TaxAct for a cost of $54.95. Fortunately, the amount owed is what we anticipated so the stress level here is well below the Tornado level of years past. Here's an interesting CBS news comparison of tax software and an accountant.
