A simple W-2 return with a state filing typically runs $200 to $280. Add a Schedule C, multiple 1099s, or rental income and you're looking at $350 to $600. Business returns (S-corp, partnership) commonly start in the $800s and climb from there. Here's exactly what drives those numbers, what the IRS's own data says the average return costs, and how to tell if you're being overcharged.
Key Takeaways
- The IRS's own taxpayer burden estimate puts the average cost per return at $230, per the instructions for Form 1040-X, effective October 2025.
- A simple return (2 W-2s plus a state return) averages around $238, per a November 2023 survey of 200+ accountants; more complex individual returns with investment income, a rental, and multiple 1099s average $537 or more.
- Business returns cost significantly more. Industry benchmarks have historically put partnership and S-corp preparation in the $700s to $800s, and secondary market analyses from 2025 put current business-return pricing in the $800–$2,500 range, depending on complexity.
- You may not need to pay at all. If your 2025 adjusted gross income is $89,000 or less, you qualify for IRS Free File for the 2026 filing season.
- A preparer who charges based on a percentage of your refund is a red flag. The IRS explicitly warns against this fee structure.
- Tax prep fees are only deductible if they're tied to business, rental, or farm income (Schedule C, E, or F). Personal itemized deduction for tax prep fees was eliminated and stays eliminated under current law.
What the IRS's Own Numbers Say Tax Prep Costs
The most authoritative benchmark, if a broad one, isn't a private survey. It's the IRS itself. Every Form 1040 series instruction booklet includes a Paperwork Reduction Act notice estimating the average time and cost taxpayers spend preparing their returns. The most recently corrected figure, published in the December 2025 revision of the Form 1040-X instructions, sets the average cost per return at $230, effective October 1, 2025.
That figure blends every return type and every preparation method, DIY software, paid preparer, or a mix of both, into one national average. Treat it as a floor, not a quote. Factor in return complexity, entity type, and region, and actual professional fees range well above it.
Real 2026 Pricing by Return Type
Mixing sourced numbers with rough guesses in the same table is how a lot of pricing articles quietly mislead people, so here's what's actually survey data and what's an estimate.
Individual returns (sourced to the November 2023 Intuit Accountants Tax Pro Forms Pricing Study, a survey of 200+ firms):
Scenario | Average fee |
|---|---|
2 W-2s and a state return | $238 |
2 W-2s, Schedule D, 3 1098s, 1 1099 Composite, Child Tax Credit, 2 state returns | $350 |
1 W-2, 8 1099-INT/DIV forms, 1 1098, Schedule D, Schedule E, 2 1099-NECs, 1 state return | $537 |
Business and entity returns: the National Society of Accountants' Income and Fees Survey put these in the $600s–$800s, but NSA hasn't published a widely available update recently, so treat those exact numbers as dated. More current secondary market analysis from 2025 puts the ranges higher:
Return type | Estimated 2025–2026 range |
|---|---|
Form 1065 (multi-member LLC / partnership) | $800–$2,500 |
Form 1120-S (S-corp) | $800–$2,500 |
Add-ons below are illustrative estimates, not survey data, and vary significantly by firm and complexity:
Add-on | Rough estimate |
|---|---|
Schedule C (sole proprietor / single-member LLC) | +$150–$300 |
Schedule E, per rental property | +$100–$200 |
Each additional state return | +$75–$150 |
None of these figures are a quote from any specific firm, including ours. Get an actual quote based on your return before assuming any number here applies to you.
What Actually Drives the Cost Up
A handful of factors explain most of the spread between a $230 return and an $1,800+ one:
- Number of income sources. Each additional W-2, 1099, K-1, or brokerage statement adds data entry and reconciliation time.
- Entity structure. A single-member LLC filing on Schedule C costs less than a multi-member LLC filing Form 1065, which costs less than an S-corp filing Form 1120-S with payroll and basis tracking.
- Multi-state activity. Real estate investors and remote-working high earners often owe returns in more than one state, and each additional state return is a separate filing with its own rules.
- Itemized deductions and investment complexity. A Schedule D with dozens of trades, cost basis issues, or K-1s from multiple partnerships takes materially longer than a standard deduction return.
- How organized your records are. NSA's most recent published survey data found that a large majority of preparers charge more for disorganized or incomplete paperwork, with an average surcharge over $145.
When You Qualify for Free Filing Instead
Not every return needs a paid preparer. For the 2026 filing season, taxpayers with a 2025 adjusted gross income of $89,000 or less qualify for IRS Free File: guided software from IRS partner companies, at no cost, for the federal return. Above that threshold, Free File Fillable Forms remain available to anyone regardless of income, though without guided support.
Free File works fine for a simple W-2 return. It gets considerably harder to rely on once you have business income, rental property, multi-state filings, or entity-level returns, which describes most of this audience.
How to Avoid Overpaying (or Getting Burned)
A few concrete checks protect you regardless of what you end up paying:
- Never agree to a fee based on a percentage of your refund. The IRS specifically flags this as a warning sign of a problematic preparer, since it creates an incentive to inflate deductions or credits.
- Confirm the preparer has a valid PTIN. Anyone paid to prepare federal returns must hold a Preparer Tax Identification Number, renewed annually ($18.75 for 2026). More than 800,000 paid preparers currently hold one, per the IRS's own reminder notice.
- Understand what credential you're actually paying for. CPAs, Enrolled Agents, and tax attorneys all have unlimited IRS representation rights; other paid preparers do not. The IRS's guide to choosing a tax professional breaks down the differences.
- Get organized before you hand over documents. Disorganized records are one of the most commonly cited reasons preparers charge more, so gathering W-2s, 1099s, K-1s, and receipts in advance is the easiest way to keep your quote at the lower end of the range.
- Ask what's included. A quote for "return preparation" that doesn't cover a specific state return, an extension if needed, or a response to a routine notice can turn into several smaller bills instead of one.
Is Tax Prep Even Deductible?
It depends entirely on what the fee is for. Individual taxpayers can no longer deduct tax preparation fees tied to a personal Form 1040. IRS Publication 529 confirms that tax preparation fees are a miscellaneous itemized deduction subject to the 2%-of-AGI floor, and that suspension is now permanent. The fee is still deductible when it's allocable to a business or rental activity: the instructions for Schedule C and Schedule E both specifically direct filers to include fees for tax advice and return preparation related to that business or rental activity as a deductible expense on the schedule itself. In practice, a real estate investor or business owner can often deduct the portion of a tax prep bill tied to the business or rental side of a return, even though the personal side of the same invoice isn't deductible.
Why Tax Prep Pricing Matters More for Arizona Business Owners, Investors, and High Earners
Arizona adds one relevant wrinkle worth knowing: the state generally does not tax professional services under its Transaction Privilege Tax. The Arizona Department of Revenue confirms that services built around human expertise, tax preparation included, fall outside the state's taxable business classifications. Your tax prep invoice itself won't carry Arizona sales tax, which isn't true in every state.
Beyond that local detail, a few patterns matter more for this audience specifically:
- The cheapest quote is rarely the best value once you're past a simple return. Our piece on tax planning versus tax preparation for high-income earners covers why a $200 difference in prep fees is irrelevant next to a $50,000 missed planning opportunity.
- Real estate investors should price in every property and every state. Each rental adds Schedule E complexity, and selling a property adds its own layer; see our guide to the tax consequences of selling a rental property for what that return actually involves.
- High earners frequently underpay for prep and overpay in taxes. The strategies covered in why high earners often overpay their taxes generally require a preparer doing more than form-filling.
- If you're also dealing with an IRS notice, that's a separate cost and a separate skill set. Our article on when you should hire a tax professional for IRS representation covers when basic prep isn't enough.
The Bottom Line on Tax Prep Costs
A simple return costs a few hundred dollars. A business return, a multi-state return, or a return with significant investment or rental activity costs considerably more, and it should, because the work involved is genuinely different. The number to watch isn't the sticker price. It's whether the fee structure is transparent, the preparer is properly credentialed, and the return actually reflects every deduction and strategy available to you.
K&R's strategic tax advisory and preparation team prices returns based on actual complexity, not guesswork, and works with Arizona business owners, real estate investors, and high earners on both preparation and the planning that happens the rest of the year. Contact us for a quote based on your actual return.
Frequently Asked Questions
How much does it cost to have a CPA do your taxes? A simple individual return typically runs $200 to $280. Returns with investment income, rental property, or multiple income sources commonly run $350 to $600 or more. Business entity returns (S-corp, partnership) typically start in the $800s.
Is it worth paying someone to do your taxes? For a simple W-2 return, IRS Free File or basic software is often sufficient if your income is under the annual threshold ($89,000 AGI for the 2026 season). Once you have business income, rental property, multiple states, or complex investments, a professional typically identifies deductions and strategies that offset the fee many times over.
Why do tax preparers charge so much for business returns? Business returns require entity-level compliance work beyond the return itself: basis tracking, reasonable compensation analysis for S-corps, partner allocations for multi-member LLCs, and often coordination with bookkeeping. That work takes materially more time than an individual return.
Can I deduct the cost of tax preparation? Only the portion tied to business, rental, or farm income (Schedule C, E, or F). Fees for preparing the personal, non-business portion of your return are not deductible under current law.
How do I know if a tax preparer is legitimate? Confirm they hold a current PTIN, ask about their credentials (CPA, Enrolled Agent, or attorney have the broadest representation rights), and avoid anyone who bases their fee on a percentage of your refund, which the IRS specifically warns against.
Does Arizona charge sales tax on tax preparation services? No. Arizona's Transaction Privilege Tax generally does not apply to professional services, including tax preparation, since these fall outside the state's enumerated taxable business classifications.
