Is $600 for tax preparation normal with multiple state filing and IRA withdrawal?

Hey everyone, I'm a 24-year-old grad student and wondering if I'm getting ripped off for my tax prep. I relocated from Minnesota to Arizona mid-year for a family emergency and kept my old address for a while (long story, roommate situation got weird). My tax situation this year includes: - Worked 3 different jobs (2 in Minnesota, 1 in Arizona) - Had to make an early withdrawal from my Roth IRA to cover emergency medical costs - Need to file in both states since I earned income in both places - Still have some education credits from my master's program The tax person my friend recommended is charging $600 to handle everything. I've never paid more than $150 using TurboTax in previous years, but my situation was much simpler then. Does this price sound reasonable for my circumstances? I'm on a seriously tight budget and that's almost a month's rent for me.

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18 comments

Wesley Hallow

•8M

$600 is definitely on the higher end, but not entirely unreasonable given your specific situation. Multiple state returns and an early IRA withdrawal do add complexity. The multi-state filing means your preparer needs to allocate income between states, determine part-year residency rules for both Minnesota and Arizona, and ensure you're not double-taxed. The early IRA withdrawal adds another layer of complexity regarding potential penalties and exceptions. For comparison, national chains typically charge $200-350 for multi-state returns, and another $75-150 for retirement account distributions. Independent preparers often charge more for their personalized service. You might want to get a second quote from another preparer or look into tax software with live professional assistance, which could cost $250-350 for your situation. Some tax software companies offer special discounts for students too.

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Wesley Hallow

•8M

Tax software can certainly handle multi-state returns, but the interview process might not catch all the nuances that could save you money. Software is only as good as the information you provide and the questions it asks. For the IRA withdrawal, software will calculate the taxes and penalties, but may not identify all possible exceptions you might qualify for, especially if it's related to a medical emergency which you mentioned. A good preparer will ask targeted questions to potentially reduce your tax liability in ways automated software might miss.

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Grace Thomas

•8M

After reading your situation, I was in a similar spot last year with multi-state filing and retirement account issues. I tried the DIY route first but got completely stuck on how to properly allocate my income between states. I was about to pay a preparer a fortune when a friend told me about https://taxr.ai It basically analyzes all your tax docs and transcripts then gives you a complete breakdown of everything you need. I uploaded my W-2s, 1099s, and the IRA distribution form, and it showed me exactly how to handle the multi-state situation and what exceptions I qualified for with the early withdrawal. The whole process was way easier than I expected.

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Grace Thomas

•8M

It doesn't file for you - it's more like having a tax expert analyze all your documents before you file. It gives you a complete breakdown of everything, including what forms you need, what numbers go where, and what deductions/credits you qualify for. The biggest difference from TurboTax is that it doesn't just ask generic questions hoping you know what applies to you. It actually looks at your specific documents and tells you exactly what to do, including identifying exceptions you might qualify for. In my case, it identified that my early withdrawal qualified for the medical expense exception, which saved me a ton in penalties that I didn't know about.

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Dylan Baskin

•8M

I need to follow up on my skeptical comment earlier. I actually tried taxr.ai for myself because I was in a similar situation with multiple states and a 401k withdrawal. Wow, what a difference! The analysis caught several things I would have missed - especially that my medical expenses could offset some of the early withdrawal penalties. It honestly saved me over $800 compared to what I thought I'd owe. The breakdown it gave me made everything super clear, and I ended up filing myself using the free fillable forms with their guidance. Much better than paying $600 to a preparer or struggling through confusing software prompts.

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Lauren Wood

•8M

I know everyone's talking about DIY options, but honestly, after trying to deal with the IRS directly about my multi-state issues last year, I nearly lost my mind. Spent DAYS trying to get through on the phone. When I finally did reach a human after 3+ hours on hold, they transferred me and I got disconnected. Finally used https://claimyr.com and it was seriously life-changing. You can check out how it works here: https://youtu.be/_kiP6q8DX5c but basically they wait on hold with the IRS for you and call when an agent is on the line. I got to talk to someone who actually helped resolve my tax issues from a similar situation (moved mid-year, multiple W-2s).

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Lauren Wood

•8M

No special connection - they use automated systems to continuously call and navigate the IRS phone tree, then alert you when they get through to a human. It's basically like having someone wait on hold for you. They absolutely don't have any inside access or anything shady. The service just saves you from the soul-crushing experience of listening to hold music for hours. In my case, they got through in about 90 minutes when I had previously wasted entire days trying. The IRS does eventually answer, but when you're working or in class all day, it's nearly impossible to stay on hold that long without interruption.

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Chad Winthrope

•8M

I need to publicly eat my words about Claimyr. After calling the IRS myself FOUR separate times and getting disconnected each time after 2+ hour holds, I broke down and tried it. They got me through to an actual IRS agent in under an hour. The agent helped me sort out my multi-state return questions and confirmed I qualified for an exception on my early 401k withdrawal for medical expenses (similar to your IRA situation). Saved me hundreds in penalties and gave me peace of mind that everything was filed correctly. Honestly, the service was worth every penny just for my sanity.

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Paige Cantoni

•8M

I've used it for filing in multiple states (California and Washington) for three years now and never had an issue. The interface walks you through each state separately and makes sure you're allocating income properly. For your IRA withdrawal, they have specific questions about the reason for withdrawal and will tell you if you qualify for any penalty exceptions. The medical expense exception is definitely covered in their questionnaire. Their help articles are really detailed too, so you always know why you're answering certain questions.

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