Taxpayers have three main options for getting their returns completed: doing it yourself with tax software, working with a tax professional, or using a tax preparation service. Each route carries different costs and complexity levels.
DIY tax software remains the cheapest choice for straightforward returns. Programs like TurboTax, H&R Block, and TaxAct offer free or low-cost versions for simple situations. TurboTax Free Edition handles basic returns at no charge. H&R Block's free online version works similarly. TaxAct charges $0 to $110 depending on your needs. These platforms walk you through deductions step-by-step and file electronically.
Tax preparation services like H&R Block offices and Jackson Hewitt staff accountants who handle your filing for a fee. Prices typically range from $150 to $400 for straightforward returns, climbing higher for complex situations involving self-employment income, rental properties, or multiple income streams. Local tax offices often charge less than national chains.
Enrolled agents and CPAs represent the premium option. These licensed professionals charge $150 to $400 per hour or flat fees ranging from $500 to $2,500 depending on return complexity. They excel for business owners, investors, and those with significant deductions to capture. Many offer year-round planning, not just April filing.
Your choice depends on return complexity and time. Single earners with W-2 income and basic deductions save money with free software. Homeowners with mortgage interest deductions and some investments benefit from $60-$120 software tiers. Self-employed workers, business owners, and those with rental income typically need professional help to optimize deductions and ensure compliance.
Consider also whether you want ongoing tax planning or just annual filing. Software gives you nothing beyond current-year filing. Tax professionals often identify missed strategies for future years