How Much Does It Cost to File Taxes?

Written by
How much does it cost to file taxes

Filing taxes is a yearly ritual that comes with varying price tags, depending on your financial situation and how you choose to complete your return. While some taxpayers can file for free using simple online platforms, others may need to invest in professional tax services to navigate complex situations. 

In short, the typical cost of filing taxes for a basic tax return, including a standard 1040 and state return without itemized deductions, is estimated at around $220.

The amount you may pay can vary widely based on whether you file yourself or hire a professional, the complexity of your return, and where you live. Let’s dive into the costs associated with filing taxes so you can prepare ahead of time. 

How much does it cost to have someone do your taxes?

Hiring a tax professional to file your taxes can be convenient but comes at a price. The cost to prepare taxes typically depends on how much work is involved, the professional’s qualifications, and the complexity of your return. Some tax preparers charge a flat fee, while others charge by the hour. 

In general, hiring a CPA to prepare your taxes can end up costing a few hundred dollars, but depending on your situation – it may well be worth the peace of mind.

Recommended: How to File Your Taxes Fast, Easy, and Free

Professional qualifications and experience 

The expertise of the tax preparer plays a significant role in determining the tax preparer cost. Here’s what you can expect:

  • Certified public accountant (CPA): The average cost of tax preparation by a CPA can be anywhere from $150 to $1,500 – depending on the scope of work. 
  • Tax attorney: Known for handling legal tax matters, they charge $200 – $400 per hour on average for accounting services.
  • Enrolled agent (EA): Licensed to represent taxpayers, EAs typically charge more than CPAs, ranging from $150 to $400 per hour.

The type of return you file (and its complexity)

The cost of tax preparation increases with the complexity of your tax situation. Common filing types and average costs include:

  • Form 1040 (simple return): Around $300
  • Form 1040 with Schedule C (self-employed): Around $200
  • Corporate Tax Returns (1120 or 1120S): Around $900
  • Estate or Trust Returns (Form 1041): Between $500 and $900

Complex tax situations such as multiple income streams, real estate holdings, or international assets require additional schedules and may increase costs significantly. Disorganized financial records may also drive up fees.

Here are some examples of situations that typically result in higher tax preparation costs:

  • Multiple income streams: If you earn income from a combination of sources—like freelance work, rental properties, or investments—your tax preparer will need to file additional schedules (Schedule C for self-employment income or Schedule E for rental income).
  • Ownership of a small business: Business owners must account for expenses, depreciation, payroll, and other business-related deductions, often requiring forms like 1120 or 1065.
  • Itemized deductions: Claiming deductions for mortgage interest, medical expenses, or charitable contributions may involve additional forms and documentation.
  • International assets or income: Reporting foreign investments, income, or accounts requires specialized knowledge and forms like FBAR or Form 8938.
  • Recent life changes: Events like marriage, divorce, or the sale of a home can add layers of complexity to your return.

How well you organize your financial records may also significantly impact the cost to have taxes done. When your documentation is messy or incomplete, a tax preparer may need to spend extra time sorting through your information, leading to higher fees. 

For instance, if you provide a bunch of unorganized receipts instead of a categorized spreadsheet, expect your tax preparer to charge for the additional effort.

Where you live

Your location affects tax preparation fees due to regional cost differences. For example, hiring a CPA in New York City may cost 30%–50% more than in a rural area. States with higher costs of living often have pricier tax services.

Here’s a breakdown of the average cost for preparing an itemized 1040 with a Schedule A with a professional, broken-down return by region:

  • New England (CT, ME, MA, NH, RI, VT): $285
  • Middle Atlantic (NJ, NY, PA): $303
  • South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV): $339
  • East South Central (AL, KY, MS, TN): $217
  • West South Central (AR, LA, OK, TX): $313
  • East North Central (IL, IN, MI, OH, WI): $273
  • West North Central (IA, KS, MN, MO, ND, NE, SD): $267
  • Mountain (AZ, CO, ID, MT, NM, NV, UT, WY): $310
  • Pacific (AK, CA, HI, OR, WA): $432

How can I file my taxes for free (or less)?

If hiring a professional doesn’t fit your budget, several cheapest ways to file taxes exist. Here are the top options:

MoneyLion

MoneyLion has partnered with ColumnTax to offer a tax filing service for qualifying customers* with NO filing fees, State fees, or Federal fees. It also guides you through a step-by-step process for a quick and easy experience.

IRS free filing tool

The IRS offers options for free tax filing programs for taxpayers meeting certain income thresholds, typically earning $73,000 or less annually. You can explore guided tax preparation softwares or free fillable forms if you’re comfortable filing without assistance.

Volunteer Income Tax Assistance or Tax Counseling for the Elderly

The VITA program offers free filing help to individuals earning less than $60,000, people with disabilities, and limited English speakers. While Tax Counseling for the Elderly (TCE) assists seniors 60 years and older, focusing on retirement-related tax issues. Both services are free for qualifying taxpayers.

Tax preparation software

Online platforms allow users to file taxes in a relatively straightforward way with minimum costs. Some people who meet certain income thresholds with simple returns often qualify for free plans, while more advanced features cost between $40 and $200, depending on the complexity of your return.

MoneyLion makes it easy to explore various tax filing options to find the best fit for your situation. 

Filing on your own taxes vs filing with a tax professional

When it comes to filing taxes, choosing between doing it yourself or hiring a professional depends on your financial situation, comfort with tax laws, and budget. 

While filing on your own can save money, a tax professional offers expertise that may be worth the investment for complex situations. Here’s how the two options compare:

FactorFiling on your ownFiling with a tax professional
CostLow to free ($0–$200)Higher ($150–$500+)
Time commitmentModerate to high (depending on complexity)Minimal (delegate the work)
Complex tax situationsChallenging to navigate independentlyEasily handled by experienced professionals
Error riskHigher for inexperienced filersLower due to professional oversight
Audit supportLimited (often not included)Typically included as part of the service

Choosing the right tax filing method

Filing taxes doesn’t have to break the bank. From leveraging free tax filing options to choosing affordable software or preparers, there’s a solution for every budget. Review your tax situation, evaluate your resources, and choose the best filing method for your needs.

FAQs

Should I pay someone to do my taxes?

If your taxes are complex or you want peace of mind, hiring a tax professional can be worth the cost.

How much do tax preparers charge per hour?

The tax preparer charges typically range from $75 to $400 per hour, depending on qualifications and complexity.

Are tax preparation fees deductible?

Tax preparation fees are no longer deductible (unless you’re self-employed) due to the Tax Cuts and Jobs Act of 2017.

This website utilizes necessary, analytics, functional, and marketing cookies and other online tracking technologies to learn more about you and your preferences, operate the website, improve our products and services, provide enhanced functionality, tailor content to you, and assist with advertising efforts. To learn more, see our Privacy Policy