Taxpayers face three main options when filing: do-it-yourself software, tax preparation services, and certified professionals. Each route carries different costs and complexity levels.
DIY tax software like TurboTax, H&R Block, and TaxAct works best for straightforward returns. These platforms cost between $60 and $120 for standard federal filing, with state returns adding $40 to $50 more. You answer guided questions, and the software calculates your liability or refund. This approach saves money but requires basic tax knowledge and works only for simple situations like W-2 income, standard deductions, and minimal investments.
Tax preparation services occupy the middle ground. Chains like H&R Block and Jackson Hewitt offer in-person filing for $150 to $400, depending on return complexity. Their trained preparers handle moderately complicated returns involving self-employment income, rental properties, or multiple investment accounts. Some offer refund advances, though these loans carry steep fees.
Certified public accountants (CPAs) and enrolled agents provide the premium option, typically charging $300 to $1,000 or more. These credentials require extensive training and licensing. CPAs handle complex situations: business ownership, significant capital gains, charitable contributions, and estate planning. They often provide year-round financial advice beyond tax filing.
Choose DIY software if you have basic income, claim the standard deduction, and file on time without rushing. This saves hundreds annually for simple filers.
Pick a tax service if your situation involves multiple income sources, itemized deductions, or investment income beyond simple interest. Their expertise prevents costly mistakes.
Hire a CPA or enrolled agent when you own a business, have substantial rental income, navigate major life changes like divorce or inheritance, or face IRS complications. The professional guidance typically saves more than you pay in fees.
Free filing options