You can’t run from them. You can’t hide from them. But you can get someone else to do them.
Yep, we’re talking about taxes.
For those of us who would like to spend our weekends at the park with the kids or, honestly, anywhere else but at a desk with tax forms and schedules, finding a tax advisor may be our only hope this tax season.
How much does it cost to have a professional do your taxes? Let’s take a closer look and find out.
How Much Does It Cost to Get Your Taxes Done?
The short answer is: It depends. The slightly longer answer is that the cost to file your taxes with a tax pro will vary based on a wide range of factors.
The average cost for a basic tax form preparation is about $220.1 That fee covers a standard 1040 and state return with no itemized deductions. But don’t run off with that number just yet.
Don’t let taxes overwhelm you. Connect with a RamseyTrusted tax advisor.
While the national average is a good starting place, a lot of things determine the actual cost. The truth is, tax preparation could cost anywhere between $200 and $600 or more depending on how complicated your tax situation is, where you live, and how your tax pro charges for services.
Here are four questions you should ask yourself as you decide how much to spend on your tax filing:
1. How qualified do you want your professional to be?
The average tax preparer will charge less than a high-quality advisor with loads of experience. But when it comes to the IRS and your money, the stakes can be high, depending on your specific situation.
Now, don’t get us wrong. We want you to save money just as much as you do. But when hiring experts—like tax pros, doctors and mechanics—we’re all for spending more cash to get the job done right. Paying an extra $100–300 on the front end may be worth it in the long run if the expert is thorough, accurate and ends up saving you a ton. Remember, we’re talking about estimates here, so adjust your professional expectations accordingly.
2. How organized are your taxes?
Show up at a pro’s office with crumpled receipts spilling from your pockets and manila folders packed with unorganized records and you’ll definitely pay a high fee. Here’s our rule of thumb: The more organized you are, the less work a tax pro has to do. And that means a lower cost in the end.
3. Where do you live?
The fees for hiring a tax professional differ across the country. For instance, you can expect to pay more than average on the Pacific Coast and less in the good ol’ South.2
Here are the average tax preparation fees for an itemized 1040 with a Schedule A and state return in each 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, NE, ND, SD): $267
- Mountain (AZ, CO, ID, MT, NV, NM, UT, WY): $310
- Pacific (AK, CA, HI, OR, WA): $4323
You’ll notice all these averages are higher than the $220 mentioned above, but that’s because many people who use a tax pro have more complicated situations than the standard 1040 can cover. Either way, expect a slight fluctuation in cost based on the quality of the pro, the region and your specific needs.
4. How complicated are your taxes?
Let’s be honest for a second: If you want a plain vanilla tax filing, you could probably get away with paying a fee close to the minimum range. But the more complicated your tax situation is, the more time it’ll take to prepare your return. And we all know time is money.
For example, let’s say you have a side business. You’ll want to itemize deductions and file a Schedule C IRS form in addition to your basic 1040. In that case, the average cost is around $515.4
How Do Tax Advisors Set Their Prices?
When you sit down with a tax advisor for the first time, be sure to ask how they’re going to charge you. It shouldn’t be a secret and you don’t want surprises! A tax advisor will usually follow one of these five methods:
1. They charge a set fee for each tax form or schedule.
No ifs, ands or buts about it! They have one flat fee per form or schedule. If you’re wondering what the average costs for filing common forms are, here’s the breakdown:
- $323 for a Form 1040 with a Schedule A and state return
- $220 for a Form 1040 (non-itemized) and state return
- $192 for Schedule C (business)
- $118 for Schedule D (gains and losses)
- $145 for Schedule E (rental)
- $200 for Schedule F (farm)5
2. They charge a fee that matches what you paid the year before.
If you work with the same tax advisor each year, you’ll often get a matching rate. That means your advisor will charge you what they charged the year before and maybe more if your tax situation has become more complex.
3. They charge a minimum fee plus more if your taxes are complicated.
Some advisors charge a flat fee, but if you make them think too hard, they’ll have to charge you more to compensate for their time. Definitely ask up front if your advisor has extra fees beyond the flat rate.
4. They charge a value-based fee—a price based on feeling.
Some tax advisors will say, “Your taxes feel like they’ll cost $350.” You can see how value-based fees can easily lead to disputes. Then again, advisors do this day in and day out and they’re used to quoting rates that match the elbow grease they’ll need to put into the job.
5. They charge an hourly rate.
If your tax advisor charges by the hour, make sure you find out how much they charge and how much time they expect to spend on your taxes. Usually, a tax pro will charge an hourly fee between $100–200 per hour, depending on what kind of tax forms you need to file.6 If they can get your taxes done in less time, you won’t get stuck with a high bill at the end.
Where Can You Find a Trustworthy Tax Advisor?
Think of the cost of tax preparation like the cost of getting a haircut—you can get a simple haircut for a very low price. Sure, it may not be the best haircut you’ve ever had, but for $10, you can’t complain.
Now, if you want to use a skillful stylist—someone who puts a warm towel on the back of your neck, massages your scalp, gives you a great haircut and fully styles it before you walk out—you have to pay more.
The same goes for tax advisors. If you pay around $220, you’ll probably get an average tax preparer who may or may not help you get all the deductions you deserve. But for a little bit more, you can get a trustworthy tax advisor who cares about your situation, helps you understand tax changes, and ensures you get the maximum refund back this year.
If you’d like to find a tax advisor, we can put you in touch with a professional who’s earned our seal of trust. Find a tax pro now!
Interested in becoming a RamseyTrusted Tax Pro? Let us know.