Average Cost For Someone To Do Your Taxes
Tax season is looming, and Americans need to know the cost to file. Expect to pay more this year to have a professional handle your taxes.
This article breaks down the average costs associated with hiring a tax professional in 2024, examining the factors influencing these fees and providing practical advice for taxpayers looking to minimize expenses.
The Bottom Line: What You'll Pay
The National Society of Accountants (NSA) most recent survey data reveals that the average cost for tax preparation services varies significantly based on the complexity of the return. According to the 2023-2024 survey, expect to pay around $273 for a basic 1040 form with no itemized deductions.
For those with more complicated returns, itemizing deductions on a Schedule A will increase the price. This form will include itemizing deductions like mortgage interest, charitable contributions, and medical expenses. The average cost increases to approximately $402.
If you own a business or have self-employment income, expect to pay significantly more. Schedule C, used for reporting profit or loss from a business, will cost an average of around $650 to file.
Factors Influencing Tax Preparation Costs
Several key factors determine the final cost of tax preparation. The complexity of your tax situation is the biggest driver.
Itemized Deductions: As previously stated, itemizing deductions requires more time and expertise, driving up fees.
Business Income: Self-employment or small business ownership necessitates additional schedules and potentially complex calculations.
State Taxes: If you live in a state with income tax, the cost will increase. The number of state and local returns needed increases the cost.
Geographic Location: Tax professionals in metropolitan areas typically charge higher fees due to higher overhead costs and demand.
Experience and Credentials: Enrolled Agents (EAs) and Certified Public Accountants (CPAs) will generally charge higher rates. They usually have more specialized expertise than general tax preparers.
Breakdown by Form: A Closer Look
Here's a more detailed look at average costs based on specific tax forms, derived from the NSA data:
Form 1040 (No Itemized Deductions): $273 (approximately).
Schedule A (Itemized Deductions): $402 (approximately).
Schedule C (Business Income): $650 (approximately).
State Tax Return: $170 (approximately).
Finding Affordable Tax Help
Despite rising costs, there are strategies to minimize your tax preparation expenses. Consider using tax preparation software if your return is relatively simple.
IRS Free File: If your adjusted gross income (AGI) is below a certain threshold, you can use free guided tax software through the IRS Free File program. Check the IRS website for eligibility requirements.
Volunteer Income Tax Assistance (VITA): The VITA program offers free tax help to people who generally make $60,000 or less. VITA also helps persons with disabilities and limited English-speaking taxpayers who need assistance preparing their tax returns.
Tax Counseling for the Elderly (TCE): The TCE program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE specializes in questions about pensions and retirement-related issues unique to seniors.
Carefully compare prices from multiple tax professionals before making a decision. Ask for a detailed breakdown of fees and services offered.
What to Do Now
Gather all necessary tax documents, including W-2s, 1099s, and receipts for deductions. Determine the complexity of your return and explore available options for free or low-cost tax preparation.
Don't wait until the last minute; schedule an appointment with a tax professional or begin preparing your return as soon as possible. Staying informed and proactive will help you navigate tax season efficiently and potentially save money.
