The cost of filing taxes depends on whether you do it yourself or hire someone
If you file your own taxes using free software or paper forms, you pay nothing. If you use paid tax software, you'll spend between $60 and $120 for a federal return. If you hire a tax professional — a CPA, enrolled agent, or tax preparer — you'll typically pay between $150 and $400 for a straightforward return, though complex situations cost more. The IRS itself does not charge a filing fee.
Your actual cost depends on three things: how you file, how complicated your tax situation is, and whether you claim deductions that require extra documentation. A single person with only W-2 income from one job has the lowest cost. Someone with self-employment income, rental property, investments, or business expenses will pay more, whether filing themselves or using a professional.
Key Takeaways
- The IRS offers free filing software through the Free File program if your household income is below a certain threshold, which changes each year.
- Paid tax software ranges from $60 to $120 for federal returns and usually costs extra to file state returns.
- Tax professionals charge by the hour or by the return, with rates varying widely by location and the preparer's credentials.
- Self-employed people and those with investment income typically pay more than W-2 employees because their returns require more work.
- You can deduct the cost of tax preparation as a miscellaneous expense only in certain years and situations, which has changed in recent tax law.
Free filing options through the IRS Free File program
The IRS partners with tax software companies to offer free federal filing to people whose household income falls below a set limit. That income threshold changes each year — it was $79,000 for the 2023 tax year, for example. If you may have access to, you can file your federal return at no cost using one of the participating software providers, which include TurboTax, H&R Block, TaxAct, and others.
Free File covers federal returns only. You will still need to pay to file a state return separately, unless your state offers its own free program. Some states do; others do not. You can check whether your state participates by visiting the IRS Free File website or your state tax authority's site.
If your income is above the Free File threshold, you can still file for free using IRS Form 1040 and the instructions on the IRS website, then mailing a paper return. This takes longer — the IRS processes paper returns in about three weeks during peak season — but it costs nothing.
Paid tax software and what it covers
Tax software companies charge different prices depending on which version you buy. A basic version for a straightforward federal return typically costs $60 to $90. A version that includes state filing costs $90 to $120 for both. Premium versions that handle self-employment income, rental property, or investments cost $120 to $180 or more.
The software walks you through questions about your income, deductions, and credits, then generates the forms the IRS requires. You review the return, sign it electronically, and file it directly from the software. Most people receive their refund within 21 days if they file electronically and choose direct deposit.
When comparing software prices, check whether the advertised price includes state filing. Some companies advertise a low federal price but charge separately for each state return — $40 to $60 per state is common. If you live in a state with income tax and earned income in that state, you will need to file there as well.
What tax professionals charge and how they bill
Tax preparers, enrolled agents, and CPAs charge in different ways. Some bill by the hour, typically $150 to $400 per hour depending on their location and experience. Others charge a flat fee per return, which might be $200 to $500 for a straightforward return with W-2 income and standard deductions. Complex returns — those with self-employment income, rental property, business expenses, or significant investment activity — cost more, sometimes $800 to $2,000 or higher.
A CPA (Certified Public Accountant) has passed a state exam and holds a license. An enrolled agent has passed a federal exam and can represent you before the IRS. A tax preparer may have no formal credential but is trained to prepare returns. All three can file your taxes, but CPAs and enrolled agents can also represent you if the IRS audits your return. That representation costs extra.
Ask a tax professional for their fee before you hire them. Many offer a free initial consultation where they can assess your situation and give you a quote. Some offer a discount if you've used them before or if you bring all your documents organized and ready to go.
When your tax situation costs more to file
Self-employed people pay more because their returns require Schedule C (Profit or Loss from Business), estimated tax calculations, and often the self-employment tax form. If you use paid software, self-employment versions cost $30 to $50 more than basic versions. If you hire a professional, expect to pay $400 to $800 or more depending on how many business expenses you have.
Rental property income adds complexity because you need to track depreciation, repairs, and other deductions. Investment income — dividends, capital gains, interest from multiple accounts — requires additional forms. If you have a side business plus rental income plus investments, a professional might charge $1,000 to $2,000 or more.
If you received a notice from the IRS or are being audited, hiring a professional costs significantly more because they must gather documents, respond to the IRS, and possibly represent you in correspondence or meetings. Budget $500 to $3,000 or more for audit representation, depending on complexity.
Deducting tax preparation costs
The rules for deducting tax preparation expenses changed in 2017 and remain limited. For most people, you cannot deduct the cost of preparing your personal tax return. However, if you paid a professional to prepare a business tax return (Schedule C) or rental property return (Schedule E), you can deduct that portion of the fee as a business expense on the relevant schedule.
For example, if a tax professional charged you $600 total and spent $200 of that time on your rental property return, you can deduct the $200 on Schedule E. You cannot deduct the $400 spent on your personal return. Keep the invoice from your tax preparer so you know how much time they spent on each part of your return.
Comparing your options: DIY, software, or professional
| Filing Method | Cost | Best For | Time Required |
|---|---|---|---|
| Paper form (IRS) | $0 | straightforward returns, no rush | 3+ weeks processing |
| Free File software | $0 (if income qualifies) | W-2 income below threshold | 1–2 hours, refund in 21 days |
| Paid tax software | $60–$180 | W-2 income, some deductions | 2–4 hours, refund in 21 days |
| Tax professional | $200–$800+ | Self-employed, rental income, complex situations | 1–2 hours with preparer, refund in 21 days |
Choose based on your situation and comfort level. If you have only W-2 income and take the standard deduction, free or paid software is usually enough. If you own a business or rental property, a professional saves time and often catches deductions you might miss. If your income is below the Free File threshold, start there — it costs nothing and works well for straightforward returns.
Frequently Asked Questions
Do I have to pay to file my taxes?
No. You can file for free using IRS Free File software if your income qualifies, or by mailing a paper return to the IRS. You only pay if you choose paid software or hire a professional.
Can I file my state return for free if I use Free File?
Free File covers federal returns only. Some states offer their own free filing programs, but not all. Check your state tax authority's website to see if you can file your state return for free.
What's the difference between a CPA and a tax preparer?
A CPA holds a license and has passed a state exam. A tax preparer may have no formal credential. Both can prepare your return, but only a CPA or enrolled agent can represent you if the IRS audits you. CPAs typically charge more.
Why does self-employment income cost more to file?
Self-employed returns require additional forms (Schedule C, self-employment tax) and more detailed expense tracking. Tax software charges more for self-employment versions, and professionals charge more because the work takes longer.
Can I deduct what I paid to file my taxes?
You cannot deduct the cost of preparing your personal return. You can deduct the portion of a professional's fee that was spent preparing a business return (Schedule C) or rental property return (Schedule E) as a business expense.