How Much Should You Pay for a Tax Preparer?
Did you know that almost 59% of the 134.2 million tax returns filed in 2018 were filed by independent tax preparers? In 2017, only about 50% of Americans had their taxes prepared by a professional tax preparer. Even John Koskinen, the former I.R.S. commissioner, admitted that even he had his taxes prepared by a professional. So, you are alone in this situation. However, if this is the first time that you are filing taxes, how do you know how much to pay a tax preparer?
No two financial situations are alike, so it depends.
I’ll present some average tax preparation cost estimates to help you decide.
And, I’ll show you some resources for free tax preparation available to qualifying applicants.
How Much Should You Pay a Tax Preparer?
How much you should pay a tax preparer to do your taxes? It depends on your tax situations, line itemizations, deductions, and financial tax bracket.
There is no one-size-fits-all standard when it comes to tax preparation invoicing.
So, I can only offer average pricing estimates regarding such.

First, you can peruse the website for the National Society of Accountants and find a CPA near you. If you are going to pay someone to do your taxes, get it done right and professionally the first time. Get a recommendation for or contact a certified public accountant in your area.
If you want to file a simple, no-frills Form 1040 with no itemizations or deductions, that will cost you $176. A state tax return costs the same.
Filing a Form 1040 with a Schedule A for itemized deductions will cost you $273.
Do you run a business? The preparation cost for Form 1040, Schedule A itemization deductions, a Schedule C, which itemizes business profits or losses, plus state taxes, is about $457.
The cost of preparing a Form 1040 with a Schedule C is about $184.
To list capital gains and losses on Schedule D, it will cost $124.
Income generated from real estate or other forms of supplemental income listed on Schedule E will cost $135.

Keep your receipts and tax records as orderly as possible. Try presenting a certified public accountant with a shoebox of receipts and disorganized records and you will pay dearly. Accountants will charge $117 as a baseline fee to prepare taxes with incomplete or disorganized information.
Your tax preparer will charge $128 to prepare and send correspondence letters with the I.R.S. for audit purposes.
It will cost $150-per-hour or more for in-person tax audit representation.
Compare Tax Preparers and Ask Questions
How much you pay a tax preparer will ultimately depend upon their experience, processing methods, and the complication of the task.
I advised that you should get a recommendation or referral from someone you know when considering a tax preparer.
That may be a lot easier said than done if you do not know anyone who can offer personal referrals.
Your best bet is to find a tax preparer is to shop around and compare local tax preparers. Do not be afraid to email or call and ask about experience and upfront estimates.
Remember that the more complicated, disorganized, or incomplete your tax paperwork is, the more you will have to pay.
So, as you vet local tax preparers, ask about their processing metrics. Not all tax preparers charge for their services according to one set of operating standards.
Some tax preparers charge by the form. Others charge a commission percentage against your estimated return. Some tax preparers will charge you by the hour for their services.
There are tax preparers who will charge extra fees based on their level of experience and certifications. Know what you are paying for.
Here is a service and process outline of fees that your tax preparer may charge you for:
- Minimum fee for tax return processing
- A custom fee each form or schedule
- Fee for every item data to be entered
- Fees based on the previous year’s fee
- Additional fees for any financial status changes or complications in your taxes relative to last year
- Subjectively calculated value-based fee based on self-assessed professionalism standards
- Hourly processing fee
Don’t pay for any fees that can’t be justified or explained.
Beware any tax preparer who constantly or condescendingly speaks to you in impenetrable legalese and insists you pay unexplained fees.
Don’t Be Afraid to Ask For a Discount
Life is a negotiation. Without thinking about, you may have saved a lot of money in several life situations by using the subtle art of negotiation.
Don’t be afraid to negotiate fees that you will pay a tax preparer.
Negotiation is the strategic art of compromise. Use negotiation to give and take while getting more than you give in a suave diplomatic manner. This is accomplished by being cognizant and amenable to the needs of the other party.
Appeal to the professionalism of the tax preparer, convincingly detail your financial struggles, and/or offer to demonstrably refer their services.
Ask for a discount if you need one. Almost 52 million Americans have applied for unemployment benefits since March 2020.
Many Americans under eviction protections via the CARES Act will lose the legal powers of those protections by August 24, 2020.
Times are hard now, and any tax preparer knows this.
So, professionally negotiate for discounts relative to specific financial hardships you may be experiencing.
They can only say no, right?
Still, the I.R.S. may be able to connect you to free tax preparation help if you qualify.
Free Tax Preparation Help Via the VITA Program
How much you pay a tax preparer for help will be relative to your personal finances and could be costly.
There are numerous tax preparers who will prepare tax documents for disadvantaged individuals free of charge under several I.R.S. initiatives.
The I.R.S. Volunteer Income Tax Assistance, or the VITA program, offers free tax preparation services for people who make $56,000 or less.
Tax Counseling for the Elderly, or the TCE program, offers affordable and free tax preparation for individuals over the age of 60.
There is even free tax help for people with limited English-speaking skills.
Check out the I.R.S.’s, “Get Free Tax Prep Help,” website for more information.
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Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing. Allen holds a BA degree from Marymount Manhattan College. Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.