Tax Preparation Fees – What It Costs to Get Your Taxes Done

UPDATED - How much does tax preparation cost? This guide covers the cost of tax-preparation services and software. Check out the tax-software reviews and tips to save too.
By Gina Freeman

Our articles, research studies, tools, and reviews maintain strict editorial integrity; however, we may be compensated when you click on or are approved for offers from our partners.
TAX FILING DEADLINE FOR TY2020: 04-15-21
NEW UPDATED PRICES: 2-1-21
Tax-Preparation-Fees

Tax season is the holiday hangover we love to hate.

However, we have received one gift – technological advances have made it easier for people to prepare their own taxes and bypass expensive tax accountants.

Here is a rundown of tax-preparation software and tax-preparation services (including reviews and costs) to help you find the most effective method to file your taxes.

Tax-Preparation Options – Overview

Tax-preparation options range from paper forms to full tax-preparation services:

  • DIY with paper forms, fillable forms or e-filing sites which are free to use
  • Software or online-subscription services
  • Tax preparers
  • Tax accountants

DIY methods – paper forms, fillable forms, e-filing sites

The advantage of DIY options is that they are free.

The disadvantage is that you have to know what you’re doing because most provide no help.

Free software and services are usually limited to those whose income doesn’t exceed a certain amount or whose tax return comprises only simple forms.

Some sites, like Credit Karma, support more complex returns and are free. However, they harvest a lot of sensitive personal data (to sell in exchange for providing that free service).

Paid software or online-subscription services

Tax-preparation software and online-subscription services offer more assistance.

Services and pricing vary widely. Some include wizards that offer a structured interview and input your answers into tax forms. Others allow you to view and work with the forms yourself.

Check the features carefully before committing: Some services let you get part way through your return and then tell you that you’ll need to upgrade to a more expensive version in order to finish. Some only determine the price at the time of print or e-file.

NOTE: All services and prices listed here are subject to change without notice. The only way to be sure what you’re getting is to visit each company’s website to confirm. (Last price update to this page: February 1, 2021)

Tax preparers

In-person tax preparers are great for those who don’t want to do the work themselves.

If you are not confident in your tax skills or don’t want to be bothered with preparing your own taxes, a tax preparer can save you some headaches.

Tax preparers, such as the seasonal people at Liberty, H&R Block® or Jackson Hewitt, complete a tax preparation course each year and pass a licensing exam (if required in your state). These firms also employ tax accountants with extensive experience and education to handle more complicated scenarios.

Tax accountants

Tax accountants, including CPAs, can help you with tax planning.

Tax planning helps you minimize your future tax obligations. Planners can help you choose tax-sheltered investments, for example, or help you structure your debts to take advantage of tax laws. They can help self-employed individuals maximize their legal deductions.

Tax accountants also have the know-how to prepare complicated returns for businesses, corporations, partnerships, non-profits and trusts.


Free Online Tax-Prep Options

You can do your own taxes by picking up forms from your post office or library, filling them out and mailing them in. But almost no one does this anymore because you can file online for nothing. No wasting time, gas or postage.

VITA program

If you’re eligible, you can actually get free tax assistance from a human preparer, courtesy of the Volunteer Income Tax Assistance (VITA) program offered by the IRS. Those whose income is $60,000 or less, or have disabilities, or have limited English-speaking ability can get free, basic income-tax-return preparation and electronic filing.

Many tax software companies offer free programs through the IRS Free File program. Tax experts recommend accessing your program through the IRS website to avoid accidentally ending up in a different program. If your income is too high to qualify for free tax-preparation subscriptions, you can still access free, fillable tax forms.

Use the IRS Free File Software Lookup Tool to find free federal and state-return options. It eliminates services for which you’re not eligible. This is important because one of the biggest causes for complaints from consumers is that they started a free file and then were directed to pay for an upgrade to finish the return. Here are the free options:

CreditKarma.com

https://www.creditkarma.com/tax/

Credit Karma offers free filing for most situations with an interview-like interface. However, they collect “information that identifies you or individuals in your tax household personally, such as name, address, phone, social security number and government-issued photo identification” for online marketing.

It’s $0 to file both state and federal tax returns, even if you’re taking deductions or credits.

Customer Support URL: https://support.creditkarma.com/s/newcase

CreditKarma.com Version Federal Return Cost State Return Cost
Free (all returns) $0.00 $0.00

eFile.com

https://www.efile.com/

The free service from eFile.com applies only to filers with income of $100,000 or less, taking the standard deduction and having no dependents or retirement income and no more than $1,500 in interest income. There is free customer support by email only, and it can take up to three days to hear back. User reviews have improved slightly since 2019 when eFile.com received an average of one star.

Customer Support URL: https://www.efile.com/tax-service/contact/efile-contact/

eFile.com Version Federal Return Cost State Return Cost
Free Basic (unlimited state returns) $0.00 $28.95

Etax.com

https://www.etax.com/

Etax.com features an interview-style preparation. The free service supports the most basic tax return for single or married taxpayers without dependents who also need to file a state tax return.

The Free federal offer is a promotional discount for Basic filers who are also filing a state tax return. (The website indicates that purchase of a state return is required for the Free version.) Actual prices are determined at the time of print or efile and are subject to change without notice. Etax user reviewers give the service 1.6 stars with most dissatisfaction related to customer service issues.

Customer Support URL: https://www.etax.com/support/

Customer Support Phone #: (718) 275-3829

Etax.com Version Federal Return Cost State Return Cost
Free (simple returns) $0.00 $29.95

ezTaxReturn.com

https://www.eztaxreturn.com/

The service is an interview-style preparation that does not allow downloading or viewing or printing of the actual tax forms. Reviewers give exTaxReturn good marks for its simple interface.

ezTaxReturn.com Version Federal Return Cost State Return Cost
Free $0.00 $19.95

Free1040TaxReturn.com

https://free1040taxreturn.com/

To access the free service, taxpayers must be age 70 or younger with a maximum AGI of $72,000, and they can live in any state except AL, DC, FL, IN, LA, MT, NH, NM, NV, RI, SD, TN, TX, or WA. User reviews average 1.2 stars, with most dissatisfaction related to customer service issues.

Customer Support URL: https://free1040taxreturn.com/contact/

Free1040TaxReturn.com Version Federal Return Cost State Return Cost
Free (simple returns) $0.00 $19.95

FreeTaxUSA.com (Tax Hawk)

https://www.freetaxusa.com
https://www.taxhawk.com/

The free version covers forms 1040, 1040EZ, 1040A, 1040Z, Schedules A, B, C, D, E, EIC, and F, 1099-A, 1099-B, 1099-C, 1099-DIV, W-2 and self-employment income. The service averages 3.5 stars in user reviews.

Customer Support URL: https://www.freetaxusa.com/customer_support.jsp

FreeTaxUSA.com Version Federal Return Cost State Return Cost
Free (simple returns) $0.00 $12.95

H&R Block

https://www.hrblock.com/online-tax-filing/

The free service applies to W-2 employees with dividend and interest income and no itemizing. Average user review is 3.2 stars.

Customer Support URL: https://www.hrblock.com/support/

H&R Block Version Federal Return Cost State Return Cost
Free Online (simple returns) $0.00 $0.00

<!—

Jackson Hewitt

https://www.jacksonhewitt.com/file-taxes-online/

Single or joint married filers with up to $100,000 taxable income, no itemizing or self-employment qualify for this free service. Online users give Jackson Hewitt an average of 3 stars.

Customer Support URL: https://www.jacksonhewitt.com/contact-us/

Customer Support Phone #: (800) 234-1040

Jackson Hewitt Version Federal Return Cost State Return Cost
Free (simple returns) $0.00 $0.00

—>

OLT OnLine Taxes

https://www.olt.com/main/home/products.asp

Free edition is limited to income of $72,000 or lower. Those who don’t qualify can still file their federal return for free and pay $9.95 for state returns. OLT gets 3.5 stars on average by online user reviews.

Customer Support URL: https://www.olt.com/main/home/service.asp

OLT OnLine Taxes Version Federal Return Cost State Return Cost
Free Edition $0.00 $7.95

TaxHawk (FreeTaxUSA.com)

https://www.freetaxusa.com
https://www.taxhawk.com/

Tax Hawk also owns FreeTaxUSA.com. They offer free federal tax preparation services for all tax situations. State returns are $12.95. There is no support, however, so you need to know what you’re doing. Tax Hawk boasts a 4-star rating in online user reviews.


TaxAct

https://www.taxact.com/

The free edition is for simple federal and state returns, filing with dependents and students. It’s free to prepare, print and e-file. TaxAct has a 3.5-star rating from online user reviewers.

Customer Support URL: https://www.taxact.com/support

Customer Support Phone #: (393) 373-3600

TaxAct Version Federal Return Cost State Return Cost
Free Edition $0.00 $4.95

Tax Slayer

https://www.taxslayer.com/

Tax Slayer’s free edition is for “basic 1040” returns only and includes a free state return. Tax Slayer’s user reviews improved markedly since 2019, averaging 4.5-stars.

Customer Support URL: https://support.taxslayer.com/hc/en-us

Customer Support Phone #: (706) 922-6741

Tax Slayer Version Federal Return Cost State Return Cost
Simply Free $0.00 $0.00
Military $0.00 $32.00

TurboTax

https://turbotax.intuit.com/

TurboTax’s free edition handles simple returns with W-2 income and the standard deduction. It does not cover itemized deductions, business or 1099-NEC income, stock sales, rental property income, or student loan interest deduction. For more complicated returns, the next level up is $40. TurboTax averages 4.5 stars by online reviewers.

Customer Support URL: https://ttlc.intuit.com/community/turbotax-support/help/03/313

TurboTax Version Federal Return Cost State Return Cost
Free (simple returns) $0.00 $0.00
Military (with military discount) $0.00 $0.00

Paid Software or Online-Subscription Services

While free tax programs might work for many people, you may prefer to purchase a tax-preparation-software product or use an online-subscription service. There are several reasons that a commercial product might be better for you:

  • Your taxes are too complex for many free options
  • You don’t want your private data collected
  • The up-selling pop-ups and ads in free products can be annoying
  • You don’t like the interface or bare-bones features of the free tax-prep versions
  • You are filing multiple returns for other taxpayers

Even if you start with a free option, it is smart to see what the providers charge for their paid products. You would want to know that in case your return needs a form not supported by the free version and you either must upgrade that product or start over.

In addition, you’ll want to consider the total cost of filing. Some free options charge nothing for the federal return but more for the state return than other paid services charge to prepare and file both the state and federal return.

Here are the details for commercial software and online-subscription-service options:

1040.com

https://www.1040.com/

1040.com recently changed its offering so that all federal and state returns are $25, and everything is included. There are no price tiers. If you want to pay for your return from your refund, there’s an extra $24.95 charge. You can also get audit assistance through Protection Plus for an additional cost of $29.95. Online user reviewers responded favorably to the new pricing, increasing its ratings from an average 1.5 stars in 2019 to 4.7 stars in 2020.

Customer Support URL: https://www.1040.com/contactus

1040.com Version Federal Return Cost State Return Cost
Online Tax Preparation – All Returns $25.00 $0

1040Now

https://1040now.net

Technically, preparation of a federal return is free at 1040Now.com – until you e-file your tax return. However, you can print your return and not pay for e-filing. The reality for most users, however, is that it costs $19.95 for the federal return and $17.95 for the state return.

Reviewers give it one star and note that there is no error-checking.

Customer Support URL: Submit your support request by email to cs@1040now.com

1040Now Version Federal Return Cost State Return Cost
Online Tax Preparation – Free

$0.00 (if you print and file your return)

$19.95 (E-file filing fee)

$17.95 (E-file or paper filing fee)

Online Tax Preparation – Paid
(Requires a valid EFIN)

$4.00 (Filing fee) $4.00 (E-file or paper filing fee)

eFile.com

https://www.efile.com/

It costs $24.95 for eFile’s Deluxe version and it supports itemized deductions. For $34.95, business forms and complex returns are covered.

For $28.95, eFile offers unlimited state returns. That is a great deal for those who file in multiple states.

Online reviewers give eFile four stars.

Customer Support URL: https://www.efile.com/tax-service/contact/efile-contact/

eFile.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Deluxe
(unlimited state returns)
$24.95 $28.95
Online Tax Preparation – Premium
(unlimited state returns)
$34.95 $28.95

eSmart Tax

https://www.esmarttax.com/

eSmartTax offers several editions from the Basic (1040 plus interest income) for $44.95, the Deluxe at $44.95 (Schedule C and most other forms) for small business owners, and the Premium at $44.95, which you’ll need if you write off a home office or need support for K-1 or rental income.

It’s offered by Liberty and the editions look the same.

The program gets four stars from user reviews and competes with TurboTax in the full-service arena. Its top version is noticeably cheaper than TurboTax. State returns are $36.95.

Customer Support URL: https://www.esmarttax.com/support/

FAQs on filing state returns: https://www.esmarttax.com/support/faq-state-returns/

eSmart Tax Version Federal Return Cost State Return Cost
Online Tax Preparation – Basic Version $44.95 $36.95
Online Tax Preparation – Deluxe Version $44.95 $36.95
Online Tax Preparation – Premium Version $44.95 $36.95

eTax.com

https://www.etax.com/

The Basic Edition costs $19.95 for the simplest returns without dependents. Those who itemize deductions or have dependents will need the $29.95 Deluxe Edition; and only the $49.95 version supports investments, self-employment income or AMT.

State returns cost $29.95, and filers can get a CPA review of their returns for $24.95.

You can deduct eTax’s fee for preparing and filing your tax return from your refund for an extra charge of $39.95.

Customer Support URL: https://www.etax.com/support/

Customer Support Phone #: (718) 275-3829

eTax.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Basic Edition $19.95 $29.95
Online Tax Preparation – Deluxe Edition $29.95 $29.95
Online Tax Preparation – Premium Edition $49.95 $29.95
CPA Review (additional) $24.95  

ExpressTaxRefund.com

https://www.expresstaxrefund.com/

Their full version is $29.95 plus $20 for e-filing; state returns are $25 and e-filing the state return is $20.

Online user reviewers give the package 4.5 stars.

Customer Support URL: https://www.expresstaxrefund.com/help.cgi

Customer Support Phone #: (800) 825-4303

ExpressTaxRefund.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Basic Return Package $29.95 (plus $20 for e-filing) $25.00 (plus $20 for e-filing)
Additional forms (each, see website) $10.00 $0.00
CPA Review (additional) $24.95  

ezTaxReturn.com

https://www.eztaxreturn.com/

This company charges $29.95 for its full version and $19.95 for a state return. Prepare and e-file your federal and state tax return combined for $39.95 ($9.95 off the total price of $49.90). For an extra $39.95, ezTaxReturn.com will manage the process if you receive a notice from the IRS or become the subject of an audit.

Those who can use it gave the software 3.5 stars. But it doesn’t support all states – or stock options sales, short sales or wash sales of stock, investment real estate property sales or depreciation or depletion for self-employed.

Customer Support URL: https://www.3.eztaxreturn.com/ezfaq/ezfaq_section.html

ezTaxReturn.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Paid
(all other returns)
$29.95 $19.95

FileYourTaxes.com

https://www.fileyourtaxes.com/

FileYourTaxes starts at $44.75 (plus $37.95 for state returns filed with the federal return). However, that fee may be just the beginning. There is a $4 surcharge for every form and schedule beyond the basic 1040.

Reviewers say the software is not easy to use and give it two stars.

Customer Support URL: https://www.fileyourtaxes.com/contact-us

Customer Support Phone #: (805) 256-1788

FileYourTaxes.com Version Federal Return Cost State Return Cost
All returns $44.75 $37.95 (if ordered with Federal return)

$44.75 (if ordered separately from Federal return)


Free1040TaxReturn.com

https://free1040taxreturn.com/

Those who don’t qualify for the free version can choose the full version of the software for $39.95. State returns are $19.95.

This product gets one star from online user reviewers.

Customer Support URL: https://free1040taxreturn.com/contact/

Free1040TaxReturn.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Paid
(all other returns)
$39.95 $19.95

FreeTaxUSA.com

https://www.freetaxusa.com
https://www.taxhawk.com/

FreeTaxUSA is owned by highly rated Tax Hawk. All federal tax returns are free. State returns are $12.95 An upgrade to its Deluxe package with professional support is just $6.99.

Users give the company 4.5 stars in online reviews.

Customer Support URL: https://www.freetaxusa.com/customer_support.jsp

FreeTaxUSA.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Free $0.00 $12.95
Online Tax Preparation – Deluxe $6.99 $12.95

H&R Block

https://www.hrblock.com/tax-software/

There are a lot of ways to work with H&R Block to prepare your taxes. Its software offerings range from the $19.95 Basic (simple returns only) to the Deluxe for homeowners and investors to the Premium at $79.95 for freelancers and rental property owners to the Premium and Business edition for everything else.

One nice thing about Block is that even the Basic allows itemized deductions. The Basic and Deluxe editions charge $39.95 for state returns (e-filing a state return costs $19.95 for each edition). But the more expensive editions come with one free state return preparation (e-filing the state return costs $19.95).

It’s considered one of the easier programs to use and gets 4.5 stars from online reviewers.

Customer Support URL: https://www.hrblock.com/support/

H&R Block (At Home) Version Federal Return Cost State Return Cost
Basic Tax Software 19.95 $39.95 (plus $19.95 to e-file)
Deluxe Tax Software
(federal only)
N/A $39.95 (plus $19.95 to e-file)
Deluxe + State Tax Software
(federal plus state)
$44.95 $0.00 (plus $19.95 to e-file)
Premium Tax Software
(federal plus state)
$64.95 $0.00 (plus $19.95 to e-file)
Premium & Business Tax Software
(federal plus state)
$79.95 $0.00 (plus $19.95 to e-file)

H&R Block also prepares taxes in-person at its many offices.

https://www.hrblock.com/tax-offices/

H&R Block In-Office Tax Preparation Federal Return Cost State Return Cost
In-Office Appointment $69.00 Unknown additional fee per state
Drop-Off Service $69.00 Unknown additional fee per state
Virtual Tax Prep $69.00 Unknown additional fee per state

H&R Block offers a full slate of options for online tax preparation if you want to do your own taxes.

https://www.hrblock.com/online-tax-filing/

H&R Block Online Tax Preparation Federal Return Cost State Return Cost
Online Tax Preparation – Deluxe Online $29.99 $36.99
Online Tax Preparation – Premium Online $49.99 $36.99
Online Tax Preparation – Self-Employed Online $84.99 $36.99
Online Tax Preparation – Basic Online Assist $39.99 Unknown additional fee per state
Online Tax Preparation – Deluxe Online Assist $29.99 $36.99 per state filed
Online Tax Preparation – Premium Online Assist $49.99 $36.99 per state filed
Online Tax Preparation – Self-Employed Online Assist $84.99 $36.99 per state filed

 


Jackson Hewitt

https://www.jacksonhewitt.com/file-taxes-online/

Jackson Hewitt offers relatively little online support, so it might not be your best option if you’re not experienced in tax preparation.

Jackson Hewitt is not very transparent about its pricing and doesn’t provide the final price of tax return preparation up front. The software automatically bumps users up to a higher-level plan (without telling them until the return is complete) if necessary to access a required form.

Online user reviews give Jackson Hewitt 3.5 stars, despite citing its high price and somewhat clunky interface.

Customer Support URL: https://www.jacksonhewitt.com/contact-us/

Customer Support Phone #: (800) 234-1040

Jackson Hewitt Version Federal Return Cost State Return Cost
Online Filing $49.00 for federal & unlimited state returns

$25.00 for federal return only


Liberty Tax

https://www.libertytax.com/online/

Online tax-filing for a simple return (a 1040 with a Schedule B for interest income) costs $44.95 and a state return is $39.95. But if you itemize, the Deluxe edition for self-employed taxpayers is $44.95, and the Premium edition for investors is $44.95. At $34.95, filing a state return on the Deluxe and Premium editions appears to be less than the Basic edition.

It gets high marks for ease of use, but the lower-priced options are limited. Users give it four stars.

Liberty also has offices for in-person preparation, but no pricing information is available up front: https://locator.libertytax.com/

Customer Support URL: https://www.libertytax.com/contact-us/

Customer Support Phone #:

  • Find an Office: (866) 871-1040
  • Headquarters: (800) 790-3863
Liberty Tax Version Federal Return Cost State Return Cost

In-Office Tax Preparation

Unknown Unknown
Online Tax Preparation – Basic $44.95 $39.95
Online Tax Preparation – Deluxe $44.95 $34.95
Online Tax Preparation – Premium $44.95 $34.95

OLT OnLine Taxes

https://www.olt.com/main/home/products.asp

The premium edition’s rock-bottom price ($7.95 each for federal and some state returns) may appeal to those who don’t need a lot of guidance with their taxes.

Those who dislike interview formats may also like this. The interface supports most tax forms and there is no up-selling.

Online reviewers give it 3.5 stars.

Customer Support URL: https://www.olt.com/main/home/service.asp

OLT OnLine Taxes Version Federal Return Cost State Return Cost

Online Tax Preparation – Premium

$7.95 $7.95 to $9.95

OnlineTaxPros.com

http://onlinetaxpros.com/index.php

OnlineTaxPros costs $19.95 for the Standard version, but it does not include state returns. The Deluxe version is $19.95 and the state return is $10.

It gets good ratings for business filers but just two stars by individual online reviewers. Note that their site is not secure.

Customer Support URL: http://onlinetaxpros.com/contact-us.php

Customer Support Phone #: (888) 658-4829

OnlineTaxPros.com Version Federal Return Cost State Return Cost
Online Tax Preparation – Standard $19.95 Unknown
Online Tax Preparation – Deluxe $19.95 $10.00

RapidTax

https://www.rapidtax.com/

The RapidTax Basic return package costs $9.95 for federal and a state return bundled with federal returns ($19.90 total) and $29.95 for each additional state return. It supports single or married filing separately with no dependents and deductions, W-2 income, Form 1099-INT & 1099-DIV, 1099-R, Form 1099-G and Earned Income Credit.

To file more complex returns, it’s $24.95 for the Deluxe option with all forms and schedules. The Premium version handles self-employment, rental income, capital gains, and Alternative Minimum Tax at $34.95. The Platinum version is for partnerships, LLCs, corporations, and estates and trusts at $49.95.

Customer Support URL: https://www.rapidtax.com/Contact-Us/

Customer Support Phone #: (877) 289-7580

RapidTax Version Federal Return Cost State Return Cost
Online Tax Preparation – Basic $9.95 $9.95
Online Tax Preparation – Deluxe $24.95 $9.95
Online Tax Preparation – Premium $34.95 $9.95
Online Tax Preparation – Platinum $49.95 $9.95
Additional state or state only $0.00 $29.95

TaxACT

https://www.taxact.com

The TaxACT Deluxe+ edition costs $24.95 for federal returns and $44.95 for state returns.

It supports filers with dependents and everything in their free edition such as child tax credit(s), Earned Income Credit, education expenses, prior year import. Then it adds unemployment income, itemized deductions, mortgage interest, HSAs, and tax-specialist support (see the website for the complete list).

More complex returns will need the Premier+ edition ($34.95 for federal and $44.95 for state) or the Self-Employed+ edition ($64.95 for federal and $44.95 for state returns).

TaxACT uses an interview format and gets four stars from online reviewers. It’s a low-cost option that’s easy to use.

Customer Support URL: https://www.taxact.com/support

Customer Support Phone #: (319) 373-3600

TaxACT Version Federal Return Cost State Return Cost
Online Tax Preparation – Deluxe+ $24.95 $44.95
Online Tax Preparation – Premier+ $34.95 $44.95
Online Tax Preparation – Self-Employed+ $64.95 $44.95

Tax Slayer

https://www.taxslayer.com/

TaxSlayer gets high marks for its pricing and ease of use. Filers can choose to walk through their return with an interview format or jump straight to the forms they want.

The Classic version is just $17 and covers almost all tax situations – self-employed, investors, etc. State returns are $32.

More expensive versions (Premium is $37 and Self-Employed is $47) add support and professional help.

Consumers online give Tax Slayer four stars.

Customer Support URL: https://support.taxslayer.com/hc/en-us

Customer Support Phone #: (706) 922-6741

Tax Slayer Version Federal Return Cost State Return Cost
Classic $17.00 $32.00
Premium $37.00 $32.00
Self-Employed $47.00 $32.00

TurboTax

https://turbotax.intuit.com/

One advantage of TurboTax is that it still allows buyers to download the software (as opposed to a cloud-based subscription) or even purchase a CD. That’s nice for those who prepare multiple returns for other people. However, experienced filers may find the required interview format a little frustrating. You can’t just go to the form you want and fill it out.

The Basic edition is recommended for step-by-step guidance at $40.00. The Deluxe edition at $70.00 covers most filers, but those with investments or rental property will need the Premier version at $100.00.

Self-employed filers must upgrade to the $110.00 Self-Employed version. State returns are $40.00 for each state. 
TurboTax may be the most comprehensive software, but it’s also the most expensive.

Online reviewers gave it 4.5 stars.

Customer Support URL: https://ttlc.intuit.com/community/turbotax-support/help/03/313

TurboTax CD/Downloadable Version Federal Return Cost State Return Cost
CD/Download Tax Software – Basic $40.00 $40.00
CD/Download Tax Software – Deluxe $70.00

1 state included
(additional states – $40.00)

See website re e-filing

CD/Download Tax Software – Premier $100.00

1 state included
(additional states – $40.00)

See website re e-filing

CD Download Tax Software – Home Business $110.00

1 state included
(additional states – $40.00)

See website re e-filing

But for those who wish to prepare their taxes in the cloud, TurboTax offers online tax preparations services too.

*Enlisted active duty and reserve military enjoy TurboTax for free.

TurboTax Online Tax Preparation Version Federal Return Cost State Return Cost
Online Tax Preparation – Deluxe (* Enlisted/active duty) $40.00 $40.00
Online Tax Preparation – Premier (* Enlisted/active duty) $70.00 $40.00
Online Tax Preparation – Self-Employed $90.00 $40.00

Professional Tax Preparation

Professional tax-preparation services vary by service and location. At the low end are services from chains like H&R Block, Jackson Hewitt and others. These firms hire seasonal employees who make on average $15 to $22 an hour. Their training typically involves completing an annual class and passing an exam.

However, the companies are staffed by tax accountants, Enrolled Agents, CPAs and tax attorneys to provide supervision and guidance.

Taxpayers can have their online or in-person taxes reviewed by these pros at an additional cost.

Tax accountants

Tax accountants, Enrolled Agents (who are federally certified and can represent taxpayers in tax court) and CPAs have advanced training for more complicated returns. And it costs more to have them complete your return.


Filing State Returns

Filing taxes is obviously cheaper in states with no income tax.

state-income-taxes

Nearly all free tax programs charge for state-tax preparation. (The exception is CreditKarma.) When comparing free programs, look also at the cost of your state return.

Some paid software may be cheaper for a federal and state return combined than other free programs with more costly state fees.

If you derive income from more than one state that has an income tax, you’ll need to file a return for each of them.

If you moved in 2019, for instance, or have a rental in another state, you may have to file multiple state tax returns. If your business has clients or customers in other states, you probably must file multiple state returns. And if you are a professional athlete playing out of state, you file a state tax return for every state in which you play.


Tax-Preparation Costs Vary by Region

Tax-preparation costs vary by location. According to accounting software provider Canopy, the average cost for a itemized 1040 and state return (when applicable) ranges from $158 in North Dakota to $483 in Hawaii. The average fees for an itemized return in the US are $302, while a non-itemized return averages $221.

Taxpayers in larger towns generally pay more than those in smaller towns, according to a 2019 fee study by the National Association of Tax Professionals (NATP).

Average minimum fees vary by town size (from $117 in communities with fewer than 10,000 people to $179 in communities with populations over 50,000). And new clients pay about $10 more than returning ones.

If you choose to have a tax accountant, Enrolled Agent, tax attorney or CPA prepare your return, you’ll pay on average $131 an hour, according to the NATP.

  • The average fee for a professional to prepare and submit a Form 1040 with no itemized deductions is $131.
  • The average fee for an itemized Form 1040 with Schedule A is $172.
  • The average fee for an itemized Form 1040 with Schedule C is $215.

Editorial Reviews – Best Tax-Preparation Software

We looked at costs, features and customer ratings for free and commercial software and rated them for simple and complex returns. We considered available support, guarantees, ease of use and the ability to import previous returns.

Best for Free Tax-Prep

TaxHawk’s free service

Most free products worked only for simple returns eligible for the IRS Free File program. But TaxHawk’s free service covers just about everyone.

Its federal service is free for all returns and state returns are just $12.95. Their Deluxe edition is only $6.99, and $12.95 for state returns.

Online reviewers love them, giving the company 4.5 stars.

Other free alternatives

For taxpayers with complicated returns who are very confident in their tax-preparation ability – and who don’t mind their personal data being collected – CreditKarma’s free online-preparation service offers everything needed to complete a filing at zero cost. The downside is that the actual form is not viewable and filers don’t have access to the real tax forms – just input screens.

Those who want more support and a high-end experience can get it with H&R Block. It allows filers to import previous years’ returns from other software. It is easy to use and offers more forms than most of its competitors and it spells out which forms they are. The product is also one of the few free options allowing itemized deductions. Block has one important edge over TurboTax – a network of offices staffed by real tax preparers and tax accountants if home filers get stuck.


Best for Simple Returns

For the simplest returns, most taxpayers can find a good solution in the array of free offerings listed in this article.

The only reason to choose a paid option for a simple 1040 return (1040 EZ and 1040A returns were retired by the IRS in 2018) is if the combination of free federal plus paid state option exceeds the cost of a paid federal plus state return.

OLT Online Taxes

OLT Online Taxes is a good bet for those earning more than $66,000 a year. Its full version is just $7.95 and its state tax return costs range from $7.95 to $9.95 as well. However, OLT does not provide a lot of guidance.

TaxACT and Tax Slayer

Taxpayers desiring more help at a low cost should consider TaxACT and Tax Slayer. Both offer a wide range of forms at a bargain price. Both get excellent reviews from users.

H&R Block and TurboTax

Filers who want all the bells and whistles can look to H&R Block and TurboTax. Both providers deliver a smooth interface and get high marks for ease of use. H&R Block’s advantages are lower cost (especially for self-employed filers) and its network of brick-and-mortar offices if customers decide to switch to an in-person experience.

TurboTax’s edge also lies in its many delivery options, from a completely cloud-based preparation to downloadable software (great for those who prepare taxes for more than one person or just prefer to have the program on their own computers) to an actual CD.


Best for Complex Returns

Tax Slayer

Those who know what they are doing and want the lowest price should consider Tax Slayer. The software was originally developed for professional preparers, and its interface is logical.

Many will appreciate the ability to go straight to the forms they want if they want to skip the interview. But they also have the option of the interview format if they want it.

The Classic version covers almost any situation and costs just $17. Upgrading to full service with the Premium version gets customers professional help for complex tax situations.

Other complex-return alternatives

Liberty’s eSmartTax gets good reviews (four stars) and its high-end version is $69.95, considerably cheaper than TurboTax. It offers the support of a full-service firm and competes directly with H&R Block. Liberty and eSmartTax software appear to be the same, but eSmartTax is slightly cheaper than Liberty.

Of course, the big names in tax preparation continue to deliver easy-to-use, highly rated and familiar products with a suite of additional services and support.

H&R Block and TurboTax both have the bells and whistles. The choice is really a matter of price and personal preference.

Note that prices for tax software change continuously and deals are common. Look for the best price for each, including promotional offers, including state returns if applicable.

Read the comparison charts on each product’s site before buying. Try to determine the lowest-priced option your situation demands before buying.

One major source of taxpayer pain as detailed in reviews was the frustration of starting with one product only to be forced to upgrade to complete the return. Note what the higher version covers and costs just in case you need it.


Best for Multiple State Returns

For taxpayers who do business or own rentals in many states, the cost of filing multiple state returns can eclipse the cost of their federal return and get very expensive very quickly. However, some products make filing cheaper and less painful.

OLT Online Taxes

OLT Online Taxes charges just $7.95 for its full version (note that it does not provide tax or filing advice), and just $7.95 to $9.95 for state tax returns.

eFile.com

And eFile.com received four-star ratings from its users. Its high-end version runs $34.95. And for $28.95, taxpayers can prepare unlimited state returns. Even their free version offers the unlimited-state-return option.


Companies We Surveyed for TY 2019 Tax Software

The table below lists providers, URLs and costs for each version. Note that the cost includes extra charges for e-filing in some cases – and prices change frequently.

Free Option Company Software Version Federal Return Cost State Return Cost State Return E-File Cost / E-File Cost Notes URL
N 1040.com N Online Tax Preparation – All Returns $25.00 $0.00 $0.00   https://www.1040.com/
N 1040Now N Online Tax Preparation $19.95 $17.95 $17.95   https://1040now.net/
Y Credit Karma N Online Tax Preparation – All Returns $0.00 $0.00 $0.00   https://www.creditkarma.com/tax/
Y eFile.com N Online Tax Preparation – Free Basic $0.00 $0.00 $28.95   https://www.efile.com
N eFile.com N Online Tax Preparation – Deluxe $24.95   $28.95   https://www.efile.com
N eFile.com N Online Tax Preparation – Premium $34.95   $28.95   https://www.efile.com
N eSmartTax N Online Tax Preparation – Basic Version $44.95 $36.95     https://www.esmarttax.com/why-esmart-tax/basic-edition/
N eSmartTax N Online Tax Preparation – Deluxe Version $44.95 $36.95     https://www.esmarttax.com/why-esmart-tax/deluxe-edition/
N eSmartTax N Online Tax Preparation – Premium Version $44.95 $36.95     https://www.esmarttax.com/why-esmart-tax/premium-edition/
Y eTax.com N Online Tax Preparation – Free Version $0.00   $29.95 * The Free federal offer is a promotional discount for Basic filers who are also filing a state tax return. ** Actual prices are determined at the time of print or efile and are subject to change without notice. https://www.etax.com
N eTax.com N Online Tax Preparation – Basic Version $19.95   $29.95   https://www.etax.com
N eTax.com N Online Tax Preparation – Deluxe Version $29.95   $29.95   https://www.etax.com
N eTax.com N Online Tax Preparation – Premium Version $49.95   $29.95   https://www.etax.com
N eTax.com N CPA Review (additional) $24.95       https://www.etax.com
N ExpressTaxRefund.com N Online Tax Preparation – Basic Return Package $29.95 $25.00 $20.00   https://www.expresstaxrefund.com
N ExpressTaxRefund.com N Online Tax Preparation – Additional Forms $10.00 $0.00     https://www.expresstaxrefund.com
N ExpressTaxRefund.com N CPA Review (additional) $24.95       https://www.expresstaxrefund.com
Y ezTaxReturn.com N Online Tax Preparation – Free $0.00 $19.95     https://www.eztaxreturn.com/
N ezTaxReturn.com N Online Tax Preparation – Paid $29.95 $19.95   $39.95 for Fed+State https://www.eztaxreturn.com/
N FileYourTaxes.com N Online Tax Preparation – All Returns $44.75 $44.75     https://www.fileyourtaxes.com
Y Free1040TaxReturn.com N Online Tax Preparation – Free $0.00 $19.95     https://free1040taxreturn.com
N Free1040TaxReturn.com N Online Tax Preparation – Paid $39.95 $19.95     https://free1040taxreturn.com
Y FreeTaxUSA.com N Online Tax Preparation – Free $0.00 $12.95 12.95   https://www.freetaxusa.com
N FreeTaxUSA.com N Online Tax Preparation – Deluxe $6.99 $12.95     https://www.freetaxusa.com
N H&R Block Tax Software Y Basic Tax Software (simple returns) $19.95 $39.95 $19.95 Downloadable https://www.hrblock.com/tax-software/
N H&R Block Tax Software Y Deluxe N/A $39.95 $19.95 Downloadable https://www.hrblock.com/tax-software/
N H&R Block Tax Software Y Deluxe + State Tax Software $44.95 $0.00 $19.95 Downloadable https://www.hrblock.com/tax-software/
N H&R Block Tax Software Y Premium Tax Software $64.95 $0.00 $19.95 Downloadable https://www.hrblock.com/tax-software/
N H&R Block Tax Software Y Premium & Business Tax Software $79.95 $0.00 $19.95 Downloadable https://www.hrblock.com/tax-software/
N H&R Block In-Office Tax Preparation N In-Office Appointment $69.00 Addt’l fee per state   In-Office https://www.hrblock.com/tax-offices/
N H&R Block In-Office Tax Preparation N Drop-Off Service $69.00 Addt’l fee per state   Drop-Off https://www.hrblock.com/tax-offices/
N H&R Block In-Office Tax Preparation N Virtual Tax Prep $69.00 Addt’l fee per state   Virtual https://www.hrblock.com/tax-offices/
Y H&R Block Online Tax Preparation N Online Tax Preparation – Free Online $0.00 $0.00   File from Your Smart Phone or Computer (chat & help center) https://www.hrblock.com/online-tax-filing/
N H&R Block Online Tax Preparation N Deluxe Online $29.99 $36.99   File from Your Smart Phone or Computer (chat & help center) https://www.hrblock.com/online-tax-filing/deluxe-online-tax-filing/
N H&R Block Online Tax Preparation N Premium Online $49.99 $36.99   File from Your Smart Phone or Computer (chat & help center) https://www.hrblock.com/online-tax-filing/premium-online-tax-filing/
N H&R Block Online Tax Preparation N Self-Employed Online $84.99 $36.99   File from Your Smart Phone or Computer (chat & help center) https://www.hrblock.com/online-tax-filing/self-employed-online-tax-filing/
N H&R Block Online Tax Preparation N Basic Online Assist $39.99 Unknown   File Online with On-Demand Help (tax expert, enrolled agent, CPA) https://www.hrblock.com/online-tax-filing/basic-online-assist-tax-filing/
N H&R Block Online Tax Preparation N Deluxe Online Assist $29.99 $36.99   File Online with On-Demand Help (tax expert, enrolled agent, CPA) https://www.hrblock.com/online-tax-filing/deluxe-online-assist-tax-filing/
N H&R Block Online Tax Preparation N Premium Online Assist $49.99 $36.99   File Online with On-Demand Help (tax expert, enrolled agent, CPA) https://www.hrblock.com/online-tax-filing/premium-online-assist-tax-filing/
N H&R Block Online Tax Preparation N Self-Employed Online Assist $84.99 $36.99   File Online with On-Demand Help (tax expert, enrolled agent, CPA) https://www.hrblock.com/online-tax-filing/self-employed-online-assist-tax-filing/
N Jackson Hewitt N Online Filing $49.00 for federal & unlimited state returns $25.00 for federal return only       https://www.jacksonhewitt.com/file-taxes-online/
N Liberty Tax N Online Tax Preparation – Basic $44.95 $39.95     https://www.libertytax.com/
N Liberty Tax N Online Tax Preparation – Deluxe $44.95 $34.95     https://www.libertytax.com/
N Liberty Tax N Online Tax Preparation – Premium $44.95 $34.95     https://www.libertytax.com/
N Liberty Tax N In-Office Tax Preparation Unknown Unknown     https://www.libertytax.com/
Y OLT OnLine Taxes N Online Tax Preparation – Free Edition $0.00 $7.95     https://www.olt.com/main/home/products.asp
N OLT OnLine Taxes N Online Tax Preparation – Premium Edition $7.95 $7.95 – $9.95     https://www.olt.com/main/home/products.asp
N Online Tax Pros N Online Tax Preparation – Standard $19.95 Unknown   Not a secure site http://onlinetaxpros.com/index.php
N Online Tax Pros N Online Tax Preparation – Deluxe $19.95 $10.00   Not a secure site http://onlinetaxpros.com/index.php
N RapidTax N Online Tax Preparation – Basic $9.95 $9.95     https://www.rapidtax.com/
N RapidTax N Online Tax Preparation – Deluxe $24.95 $9.95     https://www.rapidtax.com/
N RapidTax N Online Tax Preparation – Premium $34.95 $9.95     https://www.rapidtax.com/
N RapidTax N Online Tax Preparation – Platinum $49.95 $9.95     https://www.rapidtax.com/
N RapidTax N Additional state or state only   $29.95     https://www.rapidtax.com/
Y TaxAct N Online Tax Preparation – Free $0.00 $4.95     https://www.taxact.com
N TaxAct N Online Tax Preparation – Deluxe+ $24.95 $44.95     https://www.taxact.com
N TaxAct N Online Tax Preparation – Premier+ $34.95 $44.95     https://www.taxact.com
N TaxAct N Online Tax Preparation – Self-Employed+ $64.95 $44.95     https://www.taxact.com
Y Tax Slayer N Online Tax Preparation – Simply Free $0.00 $0.00     https://www.taxslayer.com
N Tax Slayer N Online Tax Preparation – Classic $17.00 $32.00     https://www.taxslayer.com
N Tax Slayer N Online Tax Preparation – Premium $37.00 $32.00     https://www.taxslayer.com
N Tax Slayer N Online Tax Preparation – Self-Employed+ $47.00 $32.00     https://www.taxslayer.com
Y Tax Slayer N Online Tax Preparation – Military $0.00 $32.00     https://www.taxslayer.com
Y TurboTax N Online Tax Preparation – Free Edition $0.00 $0.00     https://turbotax.intuit.com
N TurboTax N Online Tax Preparation – Deluxe $40.00 $40.00     https://turbotax.intuit.com
N TurboTax N Online Tax Preparation – Premier $70.00 $40.00     https://turbotax.intuit.com
N TurboTax N Online Tax Preparation – Self-Employed+ $90.00 $40.00     https://turbotax.intuit.com
Y TurboTax N Online Tax Preparation – Military $0.00 $0.00     https://turbotax.intuit.com
N TurboTax Y CD/Download Tax Software – Basic $40.00 $40.00   Downloadable https://turbotax.intuit.com/personal-taxes/cd-download/
N TurboTax Y CD/Download Tax Software – Deluxe $70.00 1 state included (additional states – $40)
See website re e-filing
  Downloadable https://turbotax.intuit.com
N TurboTax Y CD/Download Tax Software – Premier $100.00 1 state included (additional states – $40)
See website re e-filing
  Downloadable https://turbotax.intuit.com
N TurboTax Y CD/Download Tax Sofware – Home & Business $110.00 1 state included (additional states – $40)
See website re e-filing
  Downloadable https://turbotax.intuit.com

 


How to Select a Tax Preparer

There are several types of in-person tax preparers who can prepare your return:

  • Seasonal employees of tax firms have the least amount of training and the lowest cost.

    Tax accountants, lawyers and CPAs do provide supervision, and clients can also have them review their returns for an additional fee.

  • Tax accountants have additional training and usually a four-year degree in accounting or a related field.
  • Certified Public Accountants (CPAs) have at least a bachelor’s degree in accounting or a related field, log required hours in a public accounting firm and pass a rigorous set of exams.

    CPAs can represent clients in Tax Court as well as prepare returns.

  • Enrolled Agents (EAs) are federally licensed tax practitioners who meet specific education requirements and pass a rigorous set of exams. They can represent clients in Tax Court.
  • Tax attorneys are licensed lawyers who specialize in tax law. They can help with tax planning, deal with issues like tax liens and garnishments and represent clients in Tax Court.

More complex situations may require practitioners with extensive training and higher hourly rates. Your cost depends on the practitioner’s hourly rate and the time spent on your return.

In-Person Tax Preparation and COVID-19

The year 2020 brought a new element into in-person tax preparation – COVID-19. Tax preparers are offering contactless alternatives including phone and chat consultation, drop-off services, online document uploading and more. In-person visitors will notice added safety precautions including reduced number of practitioners and clients in the office. This means scheduling might be a challenge, so start earlier than you might otherwise if you want an in-person appointment.

Selecting a Tax Preparer

The IRS published guidelines for selecting specific tax preparers:

  1. Check the preparer’s qualifications

    Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

    This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.

  2. Check the preparer’s history

    Ask the Better Business Bureau about the preparer.
    Check for disciplinary actions and the license status for credentialed preparers.

    For CPAs, check with the State Board of Accountancy.

    For attorneys, check with the State Bar Association.

    For Enrolled Agents, go to the verify Enrolled-Agent status page on IRS.gov or check the directory.

  3. Ask about service fees

    Avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, social security numbers or other information.

  4. Ask to e-file

    Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.

  5. Make sure the preparer is available

    Taxpayers may want to contact their preparer after this year’s April 15 due date. Avoid fly-by-night preparers.

  6. Provide records and receipts

    Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things out like the total income, tax deductions and credits.

  7. Never sign a blank return

    Don’t use a tax preparer who asks a taxpayer to sign a blank tax form.

  8. Review before signing

    Before signing a tax return, review it. Ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it.

    They should also make sure that their refund goes directly to them – not to the preparer’s bank account. Review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.

  9. Ensure the preparer signs and includes their PTIN

    All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.

  10. Report abusive tax preparers to the IRS

    Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest.

    Report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.


How to Save on Your Tax Bill

Tax planning involves several items. Employees want to make sure that they withhold enough taxes to avoid under-withholding penalties. Those who wish to owe nothing at tax time or receive a certain refund can adjust their W-4 form to create the result that they desire.

The IRS offers a handy Withholding Estimator taxpayers can use to fill out their W-4 forms.

Investors and business owners must send in estimated taxes either quarterly or monthly, depending on their income. They can use the Estimated Federal Tax Payment System online to do this.

Tax planning also includes paying for taxes. Taxpayers who must borrow to pay taxes or set up an installment plan end up paying interest and under-withholding penalties (.5% per month). So taxpayers who want that interest-free loan from the government but also want to pay their balance by the April 15th filing deadline should put that money where they can earn a return on it but access it easily when needed. That can be savings accounts, short-term CDs (or as part of a laddered CD plan), mutual funds (check the fine print for fees and penalties) and other liquid investments.

For complex situations, a CPA, EA or tax attorney may be able to help trim a tax bill. Finding tax-advantaged investments, the best way to set up a business or the smartest way to time and classify expenses are all parts of tax planning for lower bills in the future.


What to Do With Your Tax Refund

Those lucky enough to get a tax refund have many options for spending or saving it. At this time, however, some may need to use their refund for basic necessities like rent and groceries if their job status changed due to the coronavirus. Here are some other options for what to do with any excess amounts:

  • Increase emergency savings (Experts recommend two to six months of living expenses, depending on reliability of income.)
  • Pay down high-interest debt (This is a good strategy that can cut interest costs now and reduce future borrowing costs by increasing FICO scores.)
  • Put it toward next year’s taxes (This may be a good strategy if you owed too much in 2019 and want to head off an under-withholding penalty.)
  • Invest for retirement
  • Pay for home improvements or repairs

Tax time isn’t fun for anyone except possibly tax professionals. But with the right planning and product, most taxpayers can survive the season with minimal pain.