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I just ran across a bit of interesting information on the cost of tax preparation from the National Society of Accountants. According to their biennial survey, the average tax prep fee for an itemized Form 1040 with Schedule A plus a state tax return is $229. For a Form 1040 and state return without itemized deductions, the average price drops to $129.
Having used TurboTax myself for years, I’m convinced that the vast majority of people can do the job themselves (and just as accurately) for much less money. Of course, if you’ve had an overly complex year, or just don’t want to spend the time on it, a tax preparer could be a good idea.
Keep in mind, however, that these prices all assume that you’ve already compiled the necessary paperwork. Speaking from experience, this can be a huge time suck. Thus, even if you do end up hiring a pro, you might not save as much time as you’d think.
Average Costs for IRS Tax Form Completion
For those of us with more complex returns, here’s a rundown of average costs for other IRS tax forms:
- $212 for Form 1040 Schedule C (profit or loss from business)
- $551 for Form 1065 (partnership)
- $692 for Form 1120 (corporation)
- $665 for Form 1120S (S corporation)
- $415 for Form 1041 (fiduciary)
- $2, 044 for Form 706 (estates)
- $584 for Form 990 (tax exempt)
- $58 for Form 940 (federal unemployment)
Tax prep fees also vary regionally, so the above average aren’t necessarily applicable depending on where you live. The lowest costs are in the “East South Central” region (AL, KY, MS, TN) where a Form 1040 with a Schedule A and state return averages $137. The most expensive region is the Pacific (AK, CA, HI, OR, WA) at $292.