Written by Ross Yednock, Program Director of the Michigan Economic Impact Coalition

We are smack dab in the middle of the 2016 tax filing season. Whether or not you will receive a refund, you could end up losing some of your hard-earned money by paying an unqualified and unregulated person to file your tax return.

Unfortunately, in the multi-billion dollar tax preparation industry, all things are not equal.

While some tax professionals register with IRS and are credentialed – enrolled agents, certified public accountants and attorneys are required to meet professional standards – sixty percent of paid tax preparers are unregulated and have no training or educational requirements.

This lack of regulation combined with the tax forms’ intimidation factor means hard-working Michigan taxpayers are spending hundreds of dollars to have simple tax returns prepared.

According to the National Society of Accountants, the average American family pays anywhere from $159 – $447 on tax preparation. Many pay far more as I have learned in my annual MEIC Client interviews. The reality is that there is also no price disclosure requirement like you have when you get a loan or have your car served, leaving many taxpayers with sticker shock after the preparer has finished their return.

Most big-box companies charge by the form and tack on additional fees or hard-sell services such as offering same day “refunds” or issuing the refund on a debit card. The same day refunds are particular troublesome, as they actually refund anticipation loans (RAL) which are predatory loans using the projected refund as collateral. RALs often cost more than 200% interest rate just for the chance to receive money a few days sooner than the week or so it typically takes the IRS to issue a refund (nine out of ten refunds are issued by the IRS within 21 days with many coming in just a few days). And, if the refund doesn’t cover the loan (again, it’s a loan, not the actual refund), you must come up with the difference or risk even more fees from the preparer.

There is good news, though. Most people can keep more of their hard-earned money and file for their taxes for free!

If your household brings in under $62,000 you can file your federal taxes online for free. Those earning less than $54,000 and you can get in-person help through a voluntary income tax assistance (VITA) or a tax counseling for the elderly (TCE) preparer.

Even better than having your taxes done for free, every tax preparer at a VITA or TCE site is certified by the IRS and trained to do federal, state and local taxes. This keeps file return rejection rejection rates as low as 2-10 percent, which is much lower than those from paid bigger box companies (the U.S. Government Accountability Office found were riddled with errors in a 2014 report on its undercover investigation) and doesn’t cost you hundreds of dollars, either.

Last year 105,000 Michigan residents utilized these free tax services. If you’re among the 70 percent of Americans who will receive a refund this year, consider giving a free tax preparer a try. It won’t cost you anything and, chances are, it’ll be as good (if not better) than the paid service and will enable you to keep your money where it belongs – in your pocket.

For more information, go to Michiganfreetaxhelp.org or dial 211.