What Is the Average Cost for Tax Preparation?
Trying to file taxes may be a stressful task, particularly when you are not aware of the amount that it will cost you to have a professional file your returns. The amount you pay in tax preparation can be very different depending on many factors that may include, but are not limited to, the complexity of your filing, your geographical location, CPA, enrolled agent, or tax preparation program.
Here, we are going to deconstruct the average price of hiring someone to do your taxes, the factors that can affect the prices, and how you can make a decision that is most suitable to your circumstances.
Average Cost of Professional Tax Preparation
The National Society of Accountants averages the cost of a professional preparing a tax return in the U.S to be the following:
- In a Form 1040 where the standard deduction is used, the cost is $220
- Form 1040 with itemized deductions and Schedule A = $323
- State tax return (when filed separately) incurs a fee of $192
If you are a self-employed person, you possess rental property, or have other complexities, the fee may increase a lot.
Factors That Influence Tax Preparation Costs
The following are the primary factors that may influence what you are going to pay:
Complexity of Your Tax Return
The greater the forms and schedules you require the more time it is going to take to prepare your return.
Some examples:
- Self-employed individuals may need a Schedule C, increasing the cost by $150–$250.
- If you have rental property, expect an extra $100–$200 for Schedule E.
- Owning investments (stocks, crypto, etc.) can require Schedule D, adding $100–$150 or more.
Who Prepares Your Taxes
Tax professionals vary, and their prices differ:
Certified Public Accountants (CPAs): $200-500+ based on the level of complexity
Enrolled Agents (EAs): Generally, are less expensive than CPAs, typically between $150 and $400
Tax Preparation Chains: Around $100-$150 for simple returns
Independent Tax Preparers: Can be more lenient; the cost will be between $100 and $300
Your Location
The cost of tax preparation will be more in cities or in states where the cost of living is high.
For example:
New York City or San Francisco: You could be paying 20-30 percent above what the rest of the country is paying.
Smaller towns or rural areas: There are usually lower fees.
Additional Services
Other tax preparers provide additional services which include:
- Audit protection
- Tax planning
- Year-round support
These can add $50-$200+ to your bill.
Cost Breakdown by Tax Form
Here’s a helpful breakdown of average fees for common tax forms:
| Tax Form | Average Cost |
| Form 1040 (no itemized deductions) | $220 |
| Form 1040 + Schedule A (itemized) | $323 |
| Schedule C (self-employed) | $192 |
| Schedule E (rental income) | $145 |
| Schedule D (capital gains) | $142 |
| State Return | $52–$100 |
These are national averages, and thus, your personal costs might be different.
DIY Tax Filing vs. Professional Help
Tax programs and web-based tools have led to most individuals preparing their own taxes.
Here’s how the costs compare:
Tax Software (DIY Options)
- TaxSlayer, H&R Block, TurboTax, FreeTax USA
- Price: Free- $0 – $120 and above based on feature and level of complexity
- Simple federal returns may be complimentary; a state filing or detailed deductions may add to the cost.
Pros
- Less expensive than hiring a pro
- Fast and convenient
- Step-by-step guidance
Cons
- Possible mistakes in case of misinterpretation of the prompts
- The less complex returns are supported
When Is It Worth Paying More for Tax Prep?
Paying a higher fee for expert help may be worth it in certain situations:
- You are a self-employed person or a businessperson
- You are a big investor
- You sold or purchased residential real estate
- You had significant life changes (divorce, inheritance etc.)
- You desire tax planning all year round
- You’ve been audited before
A professional taxpayer can assist you in maximizing your refund, reducing liability, and also avoiding the errors that might end up costing you more over time.
How to Save Money on Tax Preparation
Looking to cut costs? Here are a few ways to lower your tax prep fees:
Get Organized
Keep all your documents with you, with:
- W-2s and 1099s
- Investment and bank statements
- Deduction or business expenses receipt
- Prior year’s tax return
Organization will decrease the time that your tax preparer will require, thus it can lower your price.
Use Free Filing Options
Provided that your income does not exceed a certain amount, you can use either IRS Free File or free state filing programs.
- In 2025, Free File will be offered to those with an AGI of less than 79,000
- Even above that, some states provide free e-filing
Ask for a Quote Upfront
You should always seek a clear fee structure with your tax preparer before they get started. There are those who charge on hourly basis and those who charge on per-form basis. It helps you know what is coming in order to prevent the unexpected.
Compare Providers
Don’t be afraid to shop around. Find the best value between local preparers, national chains, and online services.
Is the Cost of Tax Preparation Tax Deductible?
Unfortunately, tax preparation expenses can not be deducted anymore by the majority of taxpayers because of the changes made to the tax law in the Tax Cuts and Jobs Act (TCJA).
If you are a self-employed person, you can also claim tax preparer fees on your business as a business expense on Schedule C.
