How much does it cost to get your taxes done?

The cost to file income taxes can fall anywhere between zero dollars — as in you do your taxes yourself and file for free — and several hundred dollars, with an average cost of $273 for using a tax preparer, less if you don’t itemize ($159), according to the most recent data available from the National Society of Accountants.

To judge the value correctly, though, those costs have to be weighed against the results you get, your own comfort level with going DIY, plus what could go wrong if things don’t work out.

To help you weigh the pros and cons, Get Rich Slowly has compiled this guide with detailed cost comparisons.

What are your Tax Preparation Options?

Basically, there are four options. Here’s the run-down:

Do it yourself

For basic tax returns, preparing it yourself is a fairly straightforward process, especially with IRS online forms and instructions. However, the more complicated your tax situation — e.g., your eligibility for itemized deductions or tax credits — the more you might benefit from the type of analysis and advice that a simple online template can’t give you.

Downloadable tax-preparation software

Downloadable tax-preparation software can help walk you through the steps of more complex tax returns and perhaps present you with more options relevant to your situation than would occur to you just working through a form yourself.

Online tax-preparation services

This provides automation similar to tax-preparation software; only you enter your information online rather than onto software that you download to your computer. The difference comes down to how secure you feel having all that information online in the hands of a third party (i.e., other than you and the IRS).

A tax-preparation professional

Tax professionals can give you customized advice that can save you money this year and perhaps make you more tax-efficient in years to come. However, that advice is only as good as the qualifications of the person giving it, so you need to do some due diligence not just on the firm you use but on the person responsible for your return.

A Bit About State Tax Returns

If you live and work in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, congratulations — you don’t have to worry about state taxes.

Otherwise, you’ll probably have to file a state tax return. If you had income from multiple states, you may be required to file in more than one state, and this will likely cost you additional tax preparation fees for each state.

How Much Does Tax Preparation Cost?

As you can imagine, costs for the different approaches above vary widely. Even the cost for the same type of approach can differ greatly depending on your situation and which provider you use. As a result, there is no single figure that can be quoted as being indicative of the cost of each approach. Instead, we hope to show the range of costs that are out there which can give you a representative idea of what each entails.

  1. Do it yourself. It costs nothing to use the IRS resources and file your returns on its website, though some do-it-yourselfers do incur costs by buying books and other reference materials to help them understand their tax situation. However, the public library system is a good resource instead of buying these types of books.
  2. Downloadable tax preparation software. Online tax preparation software assists you in completing and submitting the necessary forms. We’ve been monitoring these expenses for a few years now, and there hasn’t been a lot of fluctuation in price over time. The cost goes up depending on how many forms you use or how many state returns you file if, say, for example, you moved during the year.


  • The prices listed in the table below are the lowest amounts for the simplest of returns for Tax Year 2015.
  • If you are using one of these DIY services, look for a discount coupon before starting — there are plenty out there.

Downloadable Software – Lowest Advertised Cost for Tax Year 2016

Product (Company Name)


Federal 1040 Simple Price

State Price

State e-File

At Home (H&R Block ) – *



(5 Federal e-files included)



Tax Act 2015 (2nd Story Software)



(Federal e-file included)



TurboTax ® (Intuit)



(Federal e-file included)



(Except NY state.)

1. Prices shown are the lowest online advertised price as of November 8, 2016.
2. Most “free” services are limited to customers with a certain tax situation.
3. Information provided is for general guidance only. Contact provider or visit official website for specific details, as prices can change without notice.
4. * Visit individual website for special bonus offers.

Online Tax Preparation – Lowest Advertised Cost for Tax Year 2016

Product (Company Name)


Federal 1040 Simple Price

State Price

State e-File
(HBS Financial Group Ltd)
Federal Edition $0 $9.95 $0 1040EZ $14.95 (includes e-File) $17.95 $0 (CCH)
(Now – by Liberty Tax)
Free Simple Solution $0 $31.95 $0 Free Basic $0 $19.95

(Unlimited states)

$0 Free Edition $0 $29.95 $0
(by Liberty Tax)
Free $0 $31.95 $0 Free $0 (State purchase required) $29.95 $0 (Not available in every state) Basic Return Package $29.95 (Add $20.00 for e-file) $20.00 No information Federal Tax Return $29.95 $10 (if ordered with federal tax return) $0 Federal Tax Return $39.75 $36.50 (If ordered with federal tax return) $0 Standard Return $19.95 to $39.95 $9.95 to $19.95 $0
(Tax Hawk, Inc.)
Free Edition $0 $12.95 $0 H&R Block Free ™ $0 $29.99 $0 Free $0 $29.95 $0
(OLT OnLine Taxes)
Free Edition $0 $7.97-$9.95 Free if e-filing is available for your return
(AFJC Corp)
Free $0 No information No information. (all states may not be supported) Standard/Deluxe $19.95 (Standard) $29.95 (Available only with Deluxe) $0
(Rapid Filing Services LLC)
Basic Package $9.95 $9.95 (If filing with federal tax return)

$29.95 (If filing as standalone state return)

No information
(2nd Story Software)
1040EZ/A Tax Return $0 $0 $0
(Petz Enterprises, Inc. – Now Liberty Online)
EZ $19.95 $31.95 $0 Federal Tax Return $0 $14.99 $0 Free Basic Edition $0 $28.99 (Actual price determined at print or e-file and subject to change without notice) $0
Federal Free Edition $0 $0 $0
1. Prices shown are lowest online advertised price as of November 8, 2016.

2. Most “free” services are limited to customers with a certain tax situation.
3. Information provided is for general guidance only. Contact provider or visit official website for specific details, as prices can change without notice.

Cost to Professionally Prepare Other Tax Forms

Not everyone has a simple return. Here’s what the NSA’s most recent survey found for average tax preparation fees for more complicated forms:

  • $174 for a Form 1040 Schedule C (business)
  • $634 for a Form 1065 (partnership)
  • $817 for a Form 1120 (corporation)
  • $778 for a Form 1120S (S corporation)
  • $457 for a Form 1041 (fiduciary)
  • $688 for a Form 990 (tax exempt)
  • $68 for a Form 940 (Federal unemployment)
  • $115 for Schedule D (gains and losses)
  • $126 for Schedule E (rental)
  • $158 for Schedule F (farm)

In terms of location, the association also found the West had the most expensive returns per Census region:

They calculated the average tax preparation fee for an itemized Form 1040 with Schedule A and a state tax return. Here’s how it breaks down according to the NSA:

  • $348 for the Pacific (AK, CA, HI, OR, WA)
  • $314 for the Middle Atlantic (NJ, NY, PA)
  • $268 for the South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)
  • $262 for East South Central (AL, KY, MS, TN)
  • $256 for Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)
  • $246 for New England (CT, ME, MA, NH, RI, VT)
  • $240 for East North Central (IL, IN, MI, OH, WI)
  • $205 for West South Central (AR, LA, OK, TX)
  • $198 for West North Central (IA, KS, MN, MO, NE, ND, SD)

Advice on Hiring a Tax Preparer

When it comes to hiring a tax preparer, in-person advice is only as good as the qualifications of the person giving it. Here are some things to think about:

  • Check your preparer’s professional designations. A CPA, tax attorney, or Enrolled Agent is a plus. An enrolled agent is a tax preparer who has specific and technical expertise as defined by the U.S. Department of the Treasury. Once they become “EA”s they can represent taxpayers before all administrative levels of the IRS. According to the National Association of Enrolled Agents, you earn the designation if you’ve worked for five years at the IRS “in a position requiring the interpretation of the tax code” or pass an exam plus background check.
  • Make sure a preparer has a Preparer Tax Identification Number (PTIN). The IRS now requires all paid tax preparers to have a PTIN, so steer clear of a preparer who doesn’t have one.
  • Research your preparer’s history. Check with your local Better Business Bureau to see if there have been any complaints. Skim online reviews, remembering to take both highly negative and highly positive reviews with a grain of salt.
  • Full-time vs. part-time. Many tax preparers work seasonally, but people with complex tax situations often need advice throughout the year.
  • Ask about audit services. It helps to have assistance from your tax preparer if you are audited. Some preparers include this in the price of your return, others charge extra, and still, others don’t provide this service at all. You should know whether your preparer will back up their work if you are audited, and how much it will cost you to get that assistance.
  • Ask about audit experience. Some successful IRS audit experience can be a plus; multiple instances of audits that went against the taxpayer should be a red flag.

Bottom Line on Finding a Tax Professional

Perhaps the most important decision in choosing tax preparation help is fitting the service to your needs. Depending on your situation, free advice can be a tremendous bargain — or it could be the most costly mistake you’ve ever made. Know your tax situation, and get appropriate help if you need it.

Above all: The IRS advises taxpayers that when using a paid preparer, never sign a blank return in advance.

Why Cost isn’t the Only Consideration

You can get quotes and compare costs, but bear in mind that cost is not the only consideration. Here are some other things to think through:

  • Your time. Let’s say you can save $50 by doing your taxes yourself. What you have to ask yourself is how long it will take you to complete your returns and how you value your time. You might well find that the value of your time exceeds, or at least significantly offsets, the cost of paying to have your taxes done.
  • The risk of over-paying. Tax laws change all the time, impacting credits, deductions, and different options for treating income and investments. Missing just one potentially tax-saving new wrinkle could cost you a multiple of what you would save by doing the returns yourself.
  • Possible fines for mistakes. For individual and estate tax returns during the 2014 fiscal year, the IRS assessed more than 31 million penalties, totaling just over $13 billion in value. Clearly, it is all too easy to make a very costly mistake in preparing returns.
  • Legal consequences for misleading returns. Beyond monetary penalties, particularly serious tax violations result in criminal prosecutions. When this happens, the IRS secures a conviction in the majority of cases it investigates, and nearly 80 percent of those convicted do jail time.

How to Choose a Tax Preparation Approach

Besides weighing the cost and consequences of various tax preparation methods, here are some other things you should do when choosing your approach:

  • Match the approach to your needs. Generally speaking, the more complex your tax situation, the more help you are likely to need. As your wealth and family size increase, the more you might want to use electronic tax tools or professional help — which is just as well because, as your career goes on, you are more likely to be able to afford that assistance.
  • Choose software that is up to date and well supported. If you use software, make sure it is up to date both technologically and with respect to changes in the tax code. Also, find out in advance what kind of user support is available.
  • Consider the reputation and resources of each provider. Do some online searching, and also find out what resources any tax preparation firm or technology provider has to keep abreast of tax code changes and tricky interpretations.
  • Take the long view. Often, people are so focused on meeting the April 15 filing deadline that they don’t think of any possible tax issues beyond that, but there are longer-term considerations. For example, some approaches offer better record-keeping that might help you if you need to reference past returns at some point.

Also, active tax advice can help you better minimize your taxes and right-size your payroll withholding so more of your money can be earning interest in a savings account rather than being held by Uncle Sam throughout the year.

Plenty of people successfully complete their own returns every year. The important things to know before you decide to do it yourself or pay for tax preparation are how the complexity of your tax situation compares to your expertise, and what the consequences of a wrong decision could be.

What option will you select this year for how to prepare your taxes? How much do you think it will cost?

Frequently Asked Questions

What is the average cost for tax preparation?

The average cost for tax preparation can vary significantly depending on the complexity of the tax return, your location, and the tax preparer you choose. However, in general, individuals can expect to pay around $100 to $500 for professional services.

How much does a tax accountant cost?

The cost of a tax accountant typically ranges from $150 to $450 per hour, again depending on your location and the complexity of your tax situation. It’s always a good idea to discuss fees upfront to avoid any surprises later on.

How much does a CPA charge to do taxes?

A Certified Public Accountant (CPA) usually charges between $100 and $400 per hour for their services. This rate can increase based on the complexity of your tax return and the CPA’s experience level.

How much does H&R Block charge to file taxes?

H&R Block’s fees for filing taxes can vary greatly based on the type of tax return and the specific services required. On average, customers can expect to pay around $200 to $300 for their services. Do note that prices could be higher for more complex tax situations.

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There are 243 comments to "How much does it cost to get your taxes done?".

  1. Nicole says 16 March 2011 at 05:11

    Love the charts!

  2. Bogey@BackNineFinance says 16 March 2011 at 05:11

    I did my own taxes this year using the online version of TurboTax. I think it cost me $112 dollars including both my federal and state return. I have rental properties and a few other complicated situations and I found this product more than adequate to handle those items.

    I think that if it all possible, people should attempt to do their own taxes (even using software or an online product). You learn a lot about the tax code, and about ways to optimize your tax situation for the following years.

    • A & S DeMendoza says 17 April 2012 at 06:28

      We are in your situation and always talk about trying to do it ourselves. We have gone to the same tax preparation fellow for years. We pay $435 each year and always feel it is way too much!! “There must be another way” Ty for sharing…..

      • Owen says 15 March 2013 at 09:21

        I was paying $195.00 to have my axes copleted by a CPA. I thought that was too much money to spend when all he did was just enter my information into his software on his computer. I now pay $65.00 to a book keeper with the same software program and she found my extra savings.

    • jeff says 13 December 2013 at 10:10

      Cheaper isn’t always better. If you use turbo tax and have a return that is somewhat or very complicated you should know you probably missed something a human would pick up on and left hundreds or thousands of dollars behind that you could have gotten back by going to a professional. The programs do miss things every year because they cannot think and are not able to pick up on scenarios as humans are. The IRS would want everyone to use a computer program or do it themselves because they would save paying back millions of dollars every year.

    • Sam Warren, CPA says 07 July 2018 at 06:03

      Yeah, you can do it yourself. Like they said, what is your time worth? Are you willing to take the risk of over paying or fines for errors? I don’t work on my truck because I haven’t invested in the training and equipment. Yes, I pay $140 / hour to the mechAnic. Why wouldn’t you want to pay $150 – hour to your CPA when you consider his education licensing, ongoing CPE that meets and probably exceeds the training your mechanic receives? Duh.

  3. Jeff C says 16 March 2011 at 05:17

    Taxact does not charge to e file a state return.

    Federal Free plus $14.95 for state, both e file for free.
    Or use the deluxe version $17.95 for both state and federal plus free e file for both. I usually use taxact every year to file my wife and I taxes as well as my four children’s taxes. I have never paid extra to e file state taxes.

  4. Matthew says 16 March 2011 at 05:44

    You forgot to mention the free tax preparation service offered by the IRS. I have been working with VITA (Voluntary Income Tax Assistance) for three years now, and I am always surprised how few people are aware of this service.,,id=107626,00.html

    • Greg says 18 April 2013 at 06:33

      Yes, Matthew!!

      The VITA program has so may things going for it: free, obviously; partial to the taxpayer, since they don’t profit from the service; longevity, since the services, and many of the IRS-trained volunteers serve year after year, as you and I have done; benefit to the community, since refunds flow back to the local economy undiminished by the usurious fees often charged by storefront preparers whose profits go to corporate coffers.

      Additionally, these centers offer benefits in other ways by promoting financial literacy and establishing networks of community support involve. Win-win!

  5. Snowballer says 16 March 2011 at 05:50

    Most of the cost of paid preparation lies in the processing cost of untangling the taxpayer’s bookkeeping errors, and hand sorting through many volumes of data to find the handful of it that’s relevant, FWIW.

    • Sam Warren, CPA says 07 July 2018 at 06:07

      Absolutely correct. If clients would keep good records and use the organizer we typically give them the fees would drop. My time is worth something. If you’re too lazy to help me help you then you’re going to pay for that.

  6. Mom of five says 16 March 2011 at 05:53

    I just use TurboTax. I’ve noticed that Jackson Hewitt and H&R Block are heavily represented in somewhat rundown neighborhoods. I have a relative whose taxes were completely messed up by H&R Block and he ended up owing thousands in penalties. I don’t know if they’re all like that, but my opinion of them is not very high.

    • jeff says 13 December 2013 at 10:13

      HR Block and JackHewitt are equivalent to fast food chains. If you want better service go to a nonchain tax preparer’s office. You will pay less and get more service and he will be there year round.

  7. kelsey says 16 March 2011 at 06:17

    I used TurboTax for the last few years, as most of my returns have been simple. This year I did my taxes by hand for the first time, because I sold stock this year and TurboTax wanted too much money to deal with that complexity. I used the IRS online tool (FreeFileFillableForms) to e-file my returns. It was tricky, and my submission was rejected the first time, but I fixed my mistake and submitted again. Second time’s the charm? 🙂

  8. Brian says 16 March 2011 at 06:41

    Tennessee also has no state income tax.

  9. Jeremy says 16 March 2011 at 06:50

    We’ve been happy with TurboTax for the last 5 years, although we’re probably going with a CPA next year due to business income. You can get 10-20% off TurboTax through various bank promotions. State Farm Bank gives TurboTax Deluxe away free to the first 25,000 customers each year for instance, and my local credit union gives 10% off (since I missed the 25,000 this year) Google around for other promotions and coupon codes.

    • Julie Buttry says 09 January 2014 at 07:29

      I was wondering where you heard State Farm Bank gives TurboTax Deluxe away free to the first 25,000 customers each year? I have been a state farm employee for several years and have never heard of this? That would be great to be able to tell my customers.

  10. Jake @ NotRichYet says 16 March 2011 at 07:01

    My taxes are more complicated these days:
    * Income in 4-5 states (road warrior) -> TurboTax usually chokes on multi-state stuff

    * Rental property (need guidance on what are legit expenses)

    * At the cusp of just being in or out of AMT

    I have a CPA I have used for several years now. Last years return cost me $500. My company acknowledges that travel causes tax issues so they give me some $ that usually covers this expense.

  11. Wayne Mates says 16 March 2011 at 07:03

    New Hampshire also does not have an income tax, but it does tax interest and dividends over $2,400 (individual) and $4,800 (joint) at a 5% rate.

  12. cc says 16 March 2011 at 07:15

    i’m a freelancer in brooklyn with multiple income streams, expenses, a retirement account and some investments. i’m a bit of an airhead, so i pay to get my taxes done professionally in manhattan- i don’t trust my math skills as far as i could throw them. it costs $350, but my cpa is friendly, quick, and answers any questions i have about these things.
    i was advised to just pay up and have them done because i’m a relatively new transplant to nyc, and there are fed/state/city taxes and fees to deal with. if i were more dedicated i’d try and learn more, but as it stands i’m sure i’d make plenty of mistakes. i feel much better giving my records to my cpa and letting him do the dirty work.

  13. Bob says 16 March 2011 at 07:35

    Take your taxes to a professional – and not one of those H & R Block types. It costs more upfront but a real, professional accountant who knows the ins and outs will save you thousands.

    You’re probably costing yourself money if you use any “free” service.

    • Sam Warren, CPA says 07 July 2018 at 06:11

      LOL – Ever hear of anything good being free? Momma lied if she told you that!

  14. Jenna says 16 March 2011 at 07:43

    My taxes are pretty straight forward. I have used for a few years with no problems. Free Federal E-file and $9.95 for State. Love it!

  15. Suzanne says 16 March 2011 at 07:54

    I use TaxACT, and they give a discount after the first year. This year for state & federal (simple return) I paid $19.90 for everything, including e-filing and archiving my return. If you commit early in the year to using them (they send an email in the fall) then you can get a lower price.

    I think TaxACT is the best. I saw very little difference between them and TurboTax, except the price.

  16. gail says 16 March 2011 at 08:08

    I file personal and business (sole proprietor) taxes for my home office (25 subcontractors). I have had the same CPA (in Davis, CA) for 20 years and he charges $500. His CPA company is family-owned and family-staffed. Included in that $500, he is also available year-round for consultation (no charge), his office provides a compilation of yearly IRS changes as well as reminders of deadlines for 1099s to my subcontractors and IRS. What I especially like is the booklet provided each year for me to fill in all my itemized deductions, income, investments, etc., from which he then provides a very well-organized folder with my tax return ready to sign and fax back to him for e-file, including a report showing all the changes from one year to the next. He also provides a list of my quarterly tax due dates, with addressed envelopes and form already filled out for me to submit to IRS. In case of any IRS problems, he would be able to represent me and help me through the process. For me it’s definitely worth the $500, plus it’s a write-off for my business. Over the years he’s also been there when I needed quick advice pertaining to my grown children’s tax situations. And best of all, we’ve developed a friendship over 20 years – priceless.

  17. Kevin M says 16 March 2011 at 08:09

    Whatever you decide, avoid refund anticipation loans at all costs. If you file electronically with direct deposit, you’ll usually get your refund within 10 days or so. It’s just not worth paying the outrageous fees on RALs to get your money a few days sooner.

  18. Tyler Karaszewski says 16 March 2011 at 08:14

    It cost me $250 to get my taxes done this year, which I’ll pay gladly to avoid problems like last year’s surprise $9,000 bill from the IRS (which I’ve mentioned before).

    Also, my tax guy is in Philadelphia and I live in California, so the cost of paying an actual person to do your taxes doesn’t have to be tied so closely to your location. I just scan and email him my W2s and 1099s. He fedexes me back a package with some things I need to sign and mail.

  19. Dan says 16 March 2011 at 08:17

    In the last few years, I had to the do the 1040 long form because of some investment losses. (Stupid I’m done with that, and for the foreseeable future, it looks like I’ll be able to get away with using the 1040A. My investments are all in Roth IRA and 401k accounts, but I’ll have student loan interest deductions for awhile.

    I won’t pay for e-file. I’ve done my own taxes for awhile now (I advise having a basic understanding of how taxes work — for example, looking at the forms and seeing what kind of deductions may be available to you can be a useful thing) and it’s not that hard to print out the forms, stick them in an envelope, and drop them in the mail.

    IMHO, the only reason to pay for efile is to get that refund sooner. However, the smartest thing to do is owe a few $ at tax time, and that filing the forms ASAP just isn’t that big of a deal.

  20. Dan says 16 March 2011 at 08:19


    You might have mentioned your surprise bill before, but I missed it. What happened?

    In 2009, I got a surprise $6000 refund — got married while the wife was still in school, and didn’t realize that the tax structures favored single-income married couples quite nicely.

  21. KSK says 16 March 2011 at 08:22

    I own my own business, so I would never consider anything other than having my CPA prepare my taxes. I pay him quarterly for his services. The advice he gives me is beyond just tax issues–he has a holistic approach to taxes and business practices. It’s money well spent. I know that I will not have any surprises from the IRS, and I’ve received valuable business advice from him over the years.

  22. Amanda says 16 March 2011 at 09:31

    You can get 35% off the federal return of Turbo Tax thru Bank of America. Just search for Turbo Tax on their site.

  23. Courtney says 16 March 2011 at 09:42

    “If you had income from multiple states, you may be required to file in more than one state, and this will likely cost you additional tax preparation fees for each state.”

    This will actually be my question for next year, but I might as well ask it now while I’m thinking about it. I just moved from Maryland to Virginia. However, I still work in Maryland (and will continue to do so for at least the rest of this year). The Maryland tax form says if I live in VA and did not maintain a place of abode in MD for at least 183 days, I am exempt from Maryland tax withholding. But…
    1) Do I take that to mean I am also exempt from filing a return in Maryland next year?
    2) What happens to the 12 weeks of state taxes that have already been withheld by Maryland? Do they get sent to Virginia somehow? Do I owe a bunch of money to VA next year but get a correspondingly big refund from MD?

    • Sam Warren, CPA says 07 July 2018 at 06:17

      Surely, you’re not looking for free tax advice? Say it isn’t so! Suggest hiring a good CPA. You must trust and like this person I’m a way very similar to how you feel about your gynecologist. You are showing this person everything!

  24. Andrea says 16 March 2011 at 09:55

    I pay $280.00 at H&R Block in a Twin Cities suburb of Minnesota. I pay way too much and I know it. We always get a huge refund of 3-4k so it doesn’t feel too bad in the moment but really, it’s completely ridiculous. It’s one of the few things that bug me about our finances these days.

    • Sam Warren, CPA says 07 July 2018 at 06:26

      You would probably pay me more. A typical 1040, all in, takes 3 – 4 hours. That includes time on the phone / meeting you and data processing, archiving, printing, mailing, etc, etc. add the cost of the software, forget about CPE and the 10’s of thousands I spent on education, licensing, internship for a couple of years – it works out to around $50 / hour or around ~100k / annum. Since I’m not 100% billable is really works out to be less in terms of my income. You spend more with your mechanic and should consider yourself to have gotten a deal at that fee level!

  25. Catherine says 16 March 2011 at 10:28

    If you are a high income earner or have any sort of complexity in your tax returns (dividends, 1099 income, etc.) you will find that the money you spend having your taxes prepared by a CPA who specializes in taxes (not all do) money well spent…and tax deductbile. I say this as a VP of finance for a small company who routinely guesses my tax liability within a $100 before sending my info to my accountant each year. Why? Two sets of eyes are better than one, especially if one of the sets has spent the best part of his or her career studying the nuances of tax law. That same expertise can come in handy during the year if you have a situation that comes up which might impact your taxes. A CPA who has done your taxes for many years will know almost as much about your finances as you do. Finally, should you be audited, your accountant (who has handled more tax audits than the individual tax payer ever will) will take the lead.

    That said, if you are a W2 wage earner making mid-five figures, suck it up and do your own taxes, no matter what kind of math phobias you have. What you learn will be invaluable.

  26. Ali says 16 March 2011 at 10:29

    I get my taxes done for free by an AARP volunteer. I’ve done this for the last few years, and I couldn’t be happier. I’ve also done my taxes myself, and paid H&R block, but you can’t beat free, professional tax preparation. They provide this amazing service at libraries and community centers, typically. You don’t have to be retired to take advantage of this service!

    • KDG says 07 March 2014 at 15:22

      I am pretty sure that this service is only available to those over 60 (even though AARP accepts members at age 50), and under a certain income level. Check out the AARP web-site before counting on this free option.

    • Sam Warren, CPA says 07 July 2018 at 06:31

      Since when is AARP a “professional” tax preparer??

      Free? Is anything free worth ANYTHING? Look up the definition of free if you think I’m wrong.

      Based on AARP support/endorsement of Obamacare I refuse to have anything to do with them and you would be well advised to reconsider your association as well.

  27. Gia says 16 March 2011 at 10:38

    I paid $95 plus tip to have someone do my taxes for me (Brooklyn, NY). I give him a generous tip because he picks up the paperwork from my apartment and bring them back to me.

  28. Richard Barrington says 16 March 2011 at 10:42


    You should consult a tax advisor for an answer specific to your situation, but the first thing I would do is check with your employer to see where your state taxes are now going. There’s a good chance that state tax withholding from a Maryland employer is still going to the state of Maryland. Unless your employer can switch this to Virginia, you’ll want to minimize that withholding and set the money aside throughout the year so you can pay your Virginia taxes.

  29. Dan N says 16 March 2011 at 10:46

    I’ll chime in with the fans of Tax Act. You get to keep lower rates even if they raise the regular rates. I’ve been using them for years and am grandfathered at their old rate. With the early bird savings I pay $13.99 for deluxe Federal and State e-file. Their site is very comprehensive and they have a lot of help information.

  30. says 16 March 2011 at 10:54

    Doing taxes yourself, by hand — without software — is a really scary idea; I never would have considered it 5 years ago. But then I saw my boyfriend do it, and thought, “well, if he can, then so can I!”

    It’s time-consuming, especially the first time, but it did teach me a much deeper understanding of how taxes work … so consider the time spent doing it to be an education!

  31. Richard Barrington says 16 March 2011 at 10:57


    Tennesee does tax interest and dividends, so anyone with investment income would have to file a state tax return.

  32. Just Jan says 16 March 2011 at 10:57

    Edited to delete comment. Reread the section and found the author posted lowest advertised prices.

  33. leslie says 16 March 2011 at 11:22

    When I started freelancing about 11 years ago, I hired a CPA to do our taxes because I wanted to make sure I did all the self employment stuff correctly. Our taxes are also a little complicated by the fact that my husband owns 1/4 of a house that he inherited (along with some other relatives) in another state. We have had other oddball things pop up in the past few years too (investment losses, IRA conversion to a Roth that then had to be recharacterized and then converted again this year). Honestly, it pains me every year to write the CPA an ever increasing check ($360 this year)but I very much like that I really just gather up information and send it to him in one big envelope and then he does the rest. I also have a little more peace of mind because the house in the other state does cause me some concern from a tax and record keeping standpoint. If it ever gets sold and out of our lives then I probably won’t be as willing to pay someone else to do taxes.

  34. Tyler Karaszewski says 16 March 2011 at 11:22

    I mis-reported the cost basis for some stock I sold (actually, I think I failed to report it at all, and so the IRS assumed $0). I got my tax guy to fix the problem, and after amending my tax return, I actually ended up with a $9 refund after that. That was *after* I paid $3,000 though.

    This year, instead of having a $3,000 tax bill and then making a mistake that resulted in a $9,000 scare and a big headache, I just paid the tax guy to do it all for me from the beginning, and I have a total tax bill of about $250, when I was expecting I’d be paying another $3,000 or so. My tax guy is easily worth his $250 fee.

  35. PB says 16 March 2011 at 11:31

    I have used the same CPA for over 20 years, and the peace of mind is worth every penny. It is not cheap (just under $ 400 this year)but he always finds things that I would never think of. My grandmother left a fairly complicated estate in 1997 and he has always helped with that and other inheritances that have come along.

  36. MIKE K says 16 March 2011 at 11:58

    Unfortunately the tax code is so complex that a lot of people believe they’ve correctly done their taxes and haven’t and just slip through the cracks. Often the errors are in the governments favor. Nobody has a duty to pay more taxes than they owe. I’ve seen a lot of people grossly overpaying for no reason to save a few dollars on the preparation. If you have a relatively complicated return, including a business, rental property, etc. this may be penny wise and pound foolish.

  37. lostAnnfound says 16 March 2011 at 12:05

    Self-employed and work at home, so I have had a friend of my brother’s do it for the past 10+ years. He is a CPA. He charges $92.00 for federal and state (at least for the past +/- 5 years that has been his rate). I think he is well worth it for my peace of mind knowing I haven’t missed something.

  38. Jenny says 16 March 2011 at 12:07

    It’s worth it to do your own taxes, by hand or through something like Turbotax, at least once. I know someone who’s dropped off her taxes at H&R Block year after year, and has obviously never looked at her return–because I discovered H&R was doing them completely wrong. Wrong filing status, not claiming EIC even though she was eligible–in short, leaving about $7K on the table. Every year. She never noticed because she didn’t know enough about taxes to be able to spot the errors.

    Just another example of why self-sufficiency is usually in your best financial interest…

  39. Nicole says 16 March 2011 at 12:22

    Our taxes were so very complicated last year… that by the time we’d collected everything we needed to bring to a tax professional, had read up and made sure we understood the laws, had talked to the CPA in the family and the retired person in our family who does volunteer taxes… and had gotten luke-warm recommendations from everybody we knew for accountants… (the best recommendation being to ship all of our tax info half the country away)…

    ..that we ended up just doing the taxes ourselves with the family CPA’s blessing and TurboTax (though not the base version). He said he didn’t think that any tax preparer that we could find would do a better job.

    Right now I’m educating myself on cost-basis calculations when the companies spinoff and merge (I know the bottom-line answer, but they want a cost-basis number), and on how exactly to get the right tax numbers on that Roth conversion that seemed like such a good idea at the time.

    Next year our taxes should be back to normal, which will be a big relief (unless I decide to sell the AOL single stock and its time warner former affiliates).

    I’d totally be willing to pay someone if I had someone I could trust. But I’ve heard so many stories about accountants messing up that it really does seem easier to do it ourselves with software. That and just collecting the necessary documents is most of the work.

  40. KC says 16 March 2011 at 12:32

    I use a CPA because our taxes are a bit complicated. He always catches things we missed, too. I get the info together so I have to have a pretty good understanding of the tax code. But he does the dirty work and gets the numbers right. And now that I moved from TN to NC I have state income tax to prepare. It’s just a headache I’d rather not deal with and money well spent on a CPA. If you go with an individual or even a local firm you will at least have someone you can bounce questions off of throughout the year. It’s a perk.

  41. Pam says 16 March 2011 at 12:34

    I used to have my dad do my taxes every year but I moved overseas for about 14 months and ended up with foreign income statements, foreign tax credits, RRSP homebuyer repayments, etc. My dad told me I had to get an accountant and it was worth the money – if for nothing else than having someone know how the complexities of the varying tax years was going to work out.

    I might go back to my dad now that my taxes are going to be “normal” again but may start using UFile or some other online system. I just couldn’t do it with all the complications in my taxes for the past 2 years.

    The ~400 I paid last year and again this year are worth it to know there shouldn’t be too many surprises.

  42. Courtney says 16 March 2011 at 13:00

    @ Richard #28 – thanks for responding. I was just at my HR department today to change my address and file a VA-4 form, so I know that starting with my April 1st paycheck I should have state taxes withheld and remitted to Virginia instead of Maryland.

  43. Catherine says 16 March 2011 at 13:07

    One other point when you use an outside professional. Make sure that the CPA has liability insurance as protection in case of fraud or incompetence. I prefer to have my CPA’s have an office (home or business, it doesn’t matter) where they have been for a while and I get a great deal of comfort seeing their various diplomas and certifications tacked on the wall. You get what you pay for when it comes to tax preparers which is why it freaks me out that people are willing to give all their personal info to a guy who picks it up and delivers it for only $95. Identity theft, anyone?

  44. Tara says 16 March 2011 at 13:11

    @Tyler My tax guy is also in a different state than I am, but he emails me pages to sign and then I scan and email the signed copies back to him. I would far recommend that over mailing!

    I paid someone to do my 2010 taxes and I will re-evaluate if the cost is worth it for 2011, but it certainly gave me peace of mind for 2010 with income and retirement accounts in multiple countries, residency changing, dividends, interest, and investment sales. Plus, the cost for him to do my taxes was a little more than one day’s salary, which I would have almost spent doing them myself anyways and my time is worth something to me. I don’t know when I would have found that much time to do my taxes. It was mostly complicated due to the residency changing, so I think it might be simpler next year and I will be able to do it myself. We’ll see.

  45. Gene says 16 March 2011 at 13:40

    I used OnePriceTaxes for 2009 and it was a dreadful mistake. The software neglected to include my 1099-MISC forms even though I filled them out. It has no audit function, so you are pretty much on your own to get things right. The help was almost nonexistent so that the experience was akin to just filling out the forms I knew were needed. Also, there was no review function and the print function failed, just couldn’t print, so I had to file with no way to review my return. Once filed I was able to print, but then it was too late. Never again! I went back to TaxCut and had to use it to generate a corrected return.

    BTW, while I cannot be sure this is true for the 2010 tax year, the 2009 OnePriceTaxes software was just a framework built around their online system. You had to be online for it to work.

  46. Matthew says 16 March 2011 at 14:35

    This is a hugely helpful post! One of my challenges when shopping for services is that it’s hard to know what ballpark the prices should be in until you’ve done it a few times. Now I just need to find similar information for legal services!

  47. Jeanette Glass says 16 March 2011 at 14:51

    In Canada your accounting fees MAY be tax deductible in the year you pay them. If you have any kind of investment or business or rental income they are certainly deductible.

    The most I have EVER charged for preparing a personal tax return was $1,000 but you should have seen the mess it was in! I actually cut the guy a deal, because it took over 15 HOURS to prepare his taxes, and I could have easily billed him twice that.

    It pays to be organized when using a professional preparer. You can save a lot of money just by giving them(us) information in the format we can use it in. That stack of gas receipts you want to claim for your business use of your car?? If you add them up it might take you an hour. If *I* add them up it might take me half an hour… and cost you $75. Is that worth more or less than an hour of your time?

  48. Terrin says 16 March 2011 at 14:59

    The price comparisons can be misleading between online tax software. For instance, both Turbo Tax and Tax Act offer free versions. However, Turbo Tax’s free version only really applies to a simple 1040 or E.Z. With Turbo Tax, if you have any investment income or itemized deductions apply you are going to pay significantly more. Turbo Tax charges you extra when the tax return is more complicated. Further, it charges you extra for State filings. I used to pay about Sixty Dollars for Turbo Tax.

    With Tax Act the most you pay is $17.95 including with a State Return. Further,with Tax Act you can file a complicated federal return for free.

    One year I completed my taxes with Tax Act, Turbo Tax, and Tax Cut. I ultimately filed with Tax Act because the software did the job, and it was significantly less in cost. It also completed the FASA form for students seeking financial aid.

  49. Mark says 16 March 2011 at 15:35

    My income was pretty low last year due to getting hurt at work. If your income doesn’t pass a certain AGI threshold then you can file for free at online tax places like Turbo Tax Freedom Edition. I think the AGI limit is $31k or so.
    In several states you also will be able to file state for free through the program.
    I saw last year there were other reputable places offering the same thing.

  50. Dally says 16 March 2011 at 18:30

    I am astonished at the quoted prices for CPAs. I’m a CPA and I think I’m at rock-bottom with a minimum of $125. My hourly rate is $150/hour plus a small forms charge ($5 per return). I can be cheaper than H&R Block for clients who are organized. I only take a few new clients each year and so most of my clients are people I know well and have trained through the years.

    I consider myself their “personal financial wellness advisor” and we meet in person and I go over all aspects of their finances. How much they’re spending on expense ratios in their mutual funds. Whether they’ve got disability insurance. The best place to save for college (the parent’s Roth IRA!) Most of my clients will get charged between $200 and $300 dollars. I typically save them at least that much each year. It’s sort of a point of pride to me to always be thinking of ways to save them money. (Note that I’m a regular reader of this blog.)

  51. Tara says 16 March 2011 at 18:45

    @Dally What about filing form 8891 for Canadian RRSP accounts? I think my accountant charged per form.

  52. Paris says 16 March 2011 at 22:47

    I have used TaxACT for my taxes ever since I moved back to the US (as of three years ago, none of the free versions of e-file could handle overseas filing). I have no complaints about the software, although figuring out taxes is an unavoidably fiddly business. I like e-file better than fussing around with paperwork and my state and fed filing cost less than $20 (maybe $17?). At the moment I’m a W-2 slave so my taxes are easy, but I am thinking about starting a business and I think that would tip me over to hiring a professional CPA.

    I also have a friend who had a major tax foul-up courtesy of H&R Block. I would never use them.

  53. Amy F says 17 March 2011 at 00:07

    I’ve been using TaxAct since 2005. I have a bunch of Schedule C’s and I itemize, so I need to do the full 1040, but as Paris/#52 said, I paid under $20 total, including filing for the state. When I have major changes, I contact a family friend who does my parents’ taxes to verify that I’m making the right adjustments. He did our taxes the years that I got married and had our first baby, but I’ve been able to handle it since then.

  54. marlene says 17 March 2011 at 05:16

    I moved from California to Alabama 15 years ago. I have a home business (notary) and a residential rental property in California. I have been using my California CPA who charges per schedule. I have paid $1000 each time. Somehow it started to feel really costly (ya think?). This year I finally changed to a tax preparer here in Alabama. Cost…$200. Is charging per schedule usual. Each schedule cost approx. $100.

    • Sybil ridgley says 16 April 2013 at 15:32

      To Marlene:

      Charging that much per schedule is overboard but, I sure hope your tax rep in Alabama is a competent rep. California has a lot of generous tax deductions of which a tax professional from another state may not be totally aware.

  55. Kevin M says 17 March 2011 at 07:41

    I think Dally has a good comment – CPAs are usually much more than just tax preparers. For example, one of my customers this year had a lot of questions about elder care planning for her in-laws. We talked for awhile and I referred her to a good attorney I know. It’s about the relationship and having someone there to call and depend on. I also like to follow up with my customers later in the year to see if anything has changed or if they have any questions before it is too late to react.

  56. Kevin M says 17 March 2011 at 07:42

    @marlene – I’ve heard of charging per schedule, but not actually seen it in practice. Most CPAs charge by the hour, which I also hate. I try to price my services up front so both parties know what the expectations are.

  57. marlene says 17 March 2011 at 07:58

    Thanks, Kevin. Especially when he’s been doing my taxes for more than 20 years (before I retired). He should have the process down to a science. Thanks for the info. I knew something didn’t feel right.

  58. Richard Barrington says 18 March 2011 at 05:30


    The comprehensive services you provide raise a good point, and one we try to touch on in the article — the low bid isn’t always the best deal. As long as you are providing quality, you shouldn’t worry too much about competing on price. There will always be someone out there willing to quote a lower price, but matching quality and thoroughness are much harder for competitors to keep up with.

  59. Edwin @ Save The Bills says 18 March 2011 at 23:05

    I’ve always done my taxes at eSmartTax and only paid $20 total (free federal efile and $20 state efile). This year though they changed everything around and started charging me extra for having a house (form 1098) and a sole proprietorship (schedule c). It ended up costing me $50 🙁

    • Sam Warren, CPA says 07 July 2018 at 07:26

      Want us to start a go fund me for you? My advice is suck it up. Because you are a DIY you have no clue about your real cost!

  60. Greg says 20 March 2011 at 08:33

    An important alternative to note is the IRS sponsored Volunteer Income Tax Assistance program (,,id=219171,00.html).

    VITA volunteers prepare state and federal tax returns for free (up to $49K AGI), and provide many other services.

    For instance, the program I volunteer for has an IRS representative on site to assist with payment plans and other inquiries. Community banks reps are on hand to open checking accounts to facilitate direct deposit, and we also offer free credit score check and counseling on improving a bad credit history.

    The programs are community based, and our mission is primarily to insure that every legitimate dollar of a tax refund is put back into the hands of taxpayers, where it can benefit them and their communities. Annually, we process millions in refunds. the program is widely available. For instance, the IRS lists 85 locations in my state of Massachusetts.

    No list of filing alternatives, I feel, would be complete without a prominent mention of this program.

  61. toni says 24 March 2011 at 14:01

    I paid $390 to H&R Block. Total rip off as we are considered a simple file. I will never use them or recommend them. I wasn’t told the fee until after it was filed. I will do my own as revenge.

    • Sam Warren, CPA says 07 July 2018 at 07:23

      IRS is glad to take your money. Mught want to reconsider your plan. I don’t do a return for less than $395. When you count my time and cost of software license I make around $50/hour. Your mechanic makes 3 times that. Think about it the next time you take the Lexus in …

  62. Wendy Litten says 29 March 2011 at 10:33

    I think it is important to understand your tax return, as you can make decisions all year that affect it. I got so interested that I became an EA (Enrolled Agent) several years ago. Often, when I have a new client, I find things that they missed previously, saving them significant money each year. It can pay to go to an EA since we’re required to take continuing education in taxes each year. I have volunteered with VITA and recommend them. Volunteers must pass a basic exam each year. And, just a quick point that the article contains a small error – an unenrolled tax preparer can represent a taxpayer before the IRS if they prepared that return. Otherwise, you must use an EA, CPA or attorney.

  63. Ken says 01 February 2012 at 12:58

    Anyone who does their own taxes on these “FREE” websites are doing nothing more than costing themselves money and the IRS loves it. Why do you think the IRS puts those free web sites on there of the people to use??? because they know that you will try to do your own taxes and THEY will have a lot more of your money in the end.
    Believe me NOTHING is free. Go find yourself a good professional tax Preparer and SAVE yourself time and money. Its not worth trying to do it yourself.

  64. Ramon says 10 February 2012 at 19:27

    Well, H&R Block warrantys that they’ll do them right or they will rufund your money. I think it is a good warranty. I always do them there. NO problem!

    • Sam Warren, CPA says 07 July 2018 at 07:20

      LOL. you go with that one. Remember the Titanic was unsinkable. How did it work out for Jose lemmings!

  65. Stephen says 17 February 2012 at 11:38

    How much does it cost to have H&R Block prepare my taxes if i’m filing married jointly. I can use the Turbo Tax Deluxe free through state farm, but I am wondering if i would miss a lot of deductions and credits if i didn’t have a tax professional look at it.

    Is it worth the cost? I’ve heard others say it costs upwards of $400! That seems excessive to me.

    • Sam Warren, CPA says 07 July 2018 at 07:18

      That is a reasonable price in most situations. It can easily be a grand under certain circumstances – like “did you hand the preparer a shoe box of crap?”

  66. David says 29 February 2012 at 06:31

    I no longer trust any of the cheap ways to do my taxes. The software algorithms are geared toward keeping the company out of disputes – in other words, they heavily favor the government over the tax payer and overlook perfectly legit deductions. They have their reason for doing this. But what it means is that choosing a cheap method can cost you !

    • SB @One Cent at a Time says 29 February 2012 at 10:09

      I may not agree with you. Tax preparer companies compete with each other for client’s business. If they can’t take care of every deduction just to be good with government then they should not be doing business.

      Millions of Americans use different tax software/tools If a legit deduction is not entertained that news would go viral and can take company out of business.

      I do my taxes every year for free with TaxAct, and I know I haven’t missed any breaks which is legally mine.

      Not sure which one you are referring to in particular.

  67. Elizabeth says 29 February 2012 at 06:31

    That’s quite a thorough overview 🙂 Even though I’m not in the U.S., it’s a good framework for trying to make this decision.

    I’m surprised that the poster didn’t mention audit protection. I have an accountant handle my return (it’s not a simple one!) so I know it’s done right and I’ve got a professional to back me up if I’m ever audited. Having that support and having a professional who can answer my questions was a crucial part of my decision.

    I’ve noticed that some tax software offers audit protection and customer support as well (for instance, Turbo Tax has an “Ask Caroline” feature here in Canada.) That kind of personal help may be important to some people.

  68. Ryan @ LifeFreshOut says 29 February 2012 at 06:37

    Funny, I just wrote about this for today. I’ve been using TurboTax for a few years myself, and have found it to be pretty reasonably priced and very reassuring. I feel pretty confident about the accuracy of my return as they update the online software every year and include previous infromation to double check if what I put in makes sense for me. There’s also a help line available, though I’ve never used it so I can’t comment on how useful it is.

    I think for young people out there with simple to moderate tax situatuions, doing it on your own is pretty straightforward with some software. If my situation were a little more complicated and I had more to lose with a mistake…I might go to a professional.

  69. Sarah says 29 February 2012 at 06:44

    I think the complexity of one’s taxes also have an impact on the decision. As mentioned, if it’s going to take you hours to figure out what forms you need to fill out, what deductions you are entitled to etc. then it can be worth it to pay someone else to do it and ensure it’s done right.

    I’m not in the US but I do ours by hand because they are pretty simple to do but if either my spouse or I were self-employed (not taxed outright at work) or dealing with certain types of social assistance, or massive amounts of foreign investment then I likely would hire someone else.

    • David says 29 February 2012 at 07:04

      Hi Sarah, that is a very good point. I AM self-employed and my taxes are quite complicated. But my CPA probably saves me more money and I sleep better at night. I pay him a lot, but I feel that he keeps things straight so that I don’t have to worry. And not worrying is priceless!

    • KS says 29 February 2012 at 08:53

      My husband is self-employed and this made us tear our hair out (and now we’ve moved internationally) until we found a great accountant. Nevertheless, I keep trying. I dutifully run the numbers through one of the free programs, get a our tax owed/due number, then send everything to the accountant. I am invariably wrong. I do this every spring. It’s one of my rituals :). My husband says when I get within $10 of the accountant’s figure, I can do them.

      • david says 29 February 2012 at 09:13

        Hi KS, you may not be aware this, but the tax programs available to you are different from the program(s) that the accountants use. They are able to get you bigger refunds or you end up owing less.

      • Sarah says 29 February 2012 at 09:25

        My husband periodically talks about starting his own business and whenever he brings it up I remind him that if he does, I will no longer be doing his taxes.

      • Marianne says 29 February 2012 at 10:44

        Who comes out ahead- the accountant or your own numbers? I generally do my own taxes but I am afraid that I am not getting all of the refund that I could be. This year I am seriously considering having someone else do them even though I have already input the numbers into a software system. This year it is more difficult because we have income from our side gigs and I want to make sure it is all done correctly.

        • Amanda #2 says 29 February 2012 at 18:11

          Taking your paperwork to a CPA for one year to give you peace of mind and reassurance can be a good thing. Then you’ll know if you need to keep going or you are capable!

  70. My University Money says 29 February 2012 at 06:44

    The fact that so many people have a difficult time doing their own taxes is all the proof I need that the system is too complicated. When many people have to pay a specialist hundreds of dollars, or hope that a computer system is accurate, how are they supposed to elect people to fix the system? We don’t even understand it! I really think this should be a priority for governments across the Western World.

    • Paul in cAshburn says 29 February 2012 at 14:35

      Innumeracy is the problem. You have to remember that more than half of Americans are below average in intelligence.

    • Leah says 01 March 2012 at 05:50

      Where I work, a number of people can’t do their own taxes. And, I assure you, it’s not a tax code thing. It’s a numbers and low literacy thing. If you can’t read well, or you are not good with numbers, taxes will be hard no matter what they are (unless the gov’t just takes your money and gives no refund for overpayment).

      Think of it like housecleaning: it’s not that hard, but you do have to work at it, and some people just aren’t good at it. So they hire a professional. Nothing wrong with that.

      For what it’s worth — I don’t own a home or anything complicated — I have done my own taxes since I was a teen. I’ve found the whole process pretty darn simple even though I have never had just one job (usually 3 or 4) and sometimes have worked in multiple states. It takes time, memory, and reading skills. If you’re short on any of those, I suggest getting a professional to do your taxes.

  71. Patrick+Sievert says 29 February 2012 at 07:10

    I do mine myself. For me, anyway, it’s not that hard to figure it out. My returns aren’t super complicated (I’m not self-employed and I don’t have foreign income), but they aren’t super easy either (I have some investment income, an ESPP, etc.). It takes me about an hour to do my taxes by hand, then I have to go in and fill them out online.

  72. Kraig @ Young, Cheap Living says 29 February 2012 at 07:20

    For the past 5 years since college, I’ve done my taxes both by hiring someone to do it and by using software to do it myself. Doing it myself is my current approach, which costs me $50-60 per year. My tax situation is fairly simple so this only takes me a few hours to do. I’ve only used Turbo Tax and can honestly say that it’s a pleasure to use.

    Hiring my taxes out was costing me $150 or so per year, which is three times that of doing it myself. I chose to do it myself because I wanted to feel good about knowing how to do it myself. It’s actually more work hiring it out, as you need to send papers back and forth and make phone calls. This way, I handle it all and get it done, when I want it done. I feel better doing it myself!

  73. Sonja says 29 February 2012 at 07:31

    “Paying the right amount. According to the IRS, the average tax refund for the 2010 tax year was $3,003. Adjusted for inflation and projected over 50 years of paying taxes, this would come to more than $300,000 you might have coming to you in refunds over the course of your lifetime.”

    This is blantantly incorrect. The average household does not get $3,0003 per year in refunds. The average refund is that much. So, if 50% of the people get a refund that’s an expected $150,000 per year. If it’s 50%. A quick google tour leads me to believe 41% do not do file taxes at all. Say 20% of the people who do file taxes get a refund, that’s 20% of the 60% for a total of 12% of households.

    Which would be an expected average return of $36000 (not counting inflation) rather than $300.000 over a lifetime. But again, you’re overlooking the fact that quite a few of those refunds are for very specific cases. So, think if there’s any special expenditures you’ve made this year. Nothing special in your life? Nothing special in your taxes most likely.

    Don’t get frightened into thinking you need a professional because you’re missing out on $300.000…

    • Richard Barrington says 03 March 2012 at 10:19

      Sonja, I appreciate your point, but this does not mean the article is “blatantly incorrect.” The key word in the section you cite is “might.” I didn’t say this is what you probably have coming in lifetime refunds, but the point was to give a sense of the kind of money that can be at stake when you do your tax returns.

      Both the IRS and I describe $3,003 as the average refund – neither they nor I describe this as what the average household gets. So, the section on paying the right amount is correct as written.

  74. Minerva says 29 February 2012 at 08:02

    In the last four years I’ve used TurboTax ($30?)once, a CPA once(about $125), and went to H&R Block twice.

    Since I stayed home part of the year last year (I’m still home with the baby) I think it will be easier for me to do my taxes online.

    Last year I paid H&R Block about $300. I like that they protect you if you get audited. But this year I’m going to face my fear of getting audited and do them online with TurboTax. It should be easy and inexpensive. I already took a test drive and it seems like they are easier to use than I remember.

  75. Well Heeled Blog says 29 February 2012 at 08:09

    I’ve been using Turbo Tax since 2008, and as I am a W-2 worker with some 1099 income, no real estate, and take standard deductions, a tax preparation software is adequate for my needs. As my tax situation become more complicated I imagine I will need professional help.

    Plus, this year I actually won a Turbo Tax giveaway from another personal finance blog… so filing will be free for me. 🙂

  76. CandiR says 29 February 2012 at 08:18

    When I was single and had only one job, I did everything myself….I started paying a CPA the year (long ago) that I got: 1. Divorced, 2. Laid off, 3. Unemployment, and 4. Part-time work. I’m a smart cookie, but all of the combined factors left me feeling at sea.

    Since then I’ve stayed with him faithfully, I have a steady W2 job (or two) and 1-2 1099 jobs, and occasional other side hack jobs, so I really rely on his expertise. (hey, I wouldn’t want him doing my job, right? I’m happy to pay him to do his.)

  77. Sylvia says 29 February 2012 at 08:24

    That’s a great overview!

    One caveat – if you live in NYC, as I do, tax prep costs for having someone do it for you are more like $300-400. But it’s worth it to me. I was audited once, a hellish experience, and having an accountant to walk me through it helped enormously. (BTW, in the end I owed exactly nothing, $0.00. Keep those receipts!)

    • Steve says 29 February 2012 at 17:39

      The costs listed were almost bizarre. It seems like the costs between NYC and Kansas City were flipped for some of the numbers.

      • Richard Barrington says 05 March 2012 at 15:11


        I know what you mean – one tends to associate New York City with high costs. However, our researchers double-checked and the figures are correct. Sometimes, a higher concentration of competing services in a big city can drive prices down, which may be why New York’s price quotes were lower than Kansas City’s.

  78. PB says 29 February 2012 at 09:10

    Here on campus, our accounting students work under the supervision of professors in the VITA program, where they do tax returns for free. They are then checked by professionals before filing. The students do simple AND complicated returns because they need real world experience, so they are glad to wrestle with problems. I will never forget the year that one of my children sold a short story in England and was paid in pounds — the student nearly dance with delight at this new challenge.

    • Andie says 29 February 2012 at 11:02

      I am a volunteer tax preparer for the VITA program, which I found out about through my accounting professor. It is a tax preparation service for eligible low income taxpayers. It’s a great way to learn about the accounting world and, as a bonus, is a rewarding experience. Volunteers can get their taxes done for free through this program. (Unfortunately, I had already filed through TurboTax when I learned this.)

    • Amanda #2 says 29 February 2012 at 18:15

      I volunteered for the VITA program when I was in college!

      Some places like senior centers, etc. offer free tax prep to people of all ages. Doesn’t hurt to look around. My credit union advertised the free filing options in our state.

  79. Deb says 29 February 2012 at 09:16

    The article didn’t mention another free option — the VITA and TCE volunteer tax clinics. I’ve been volunteering locally for several years. The IRS provides certification for preparers on many types of returns, including Military, Schedule C, and International returns. We even have some CPA’s, paid preparers, and ex-IRS employees working at our clinic.

  80. Andrew says 29 February 2012 at 09:37

    Don’t go for the cheap alternative if you honestly don’t know what you’re doing.

    I usually use tax prep software, but there have been years where I turned it over to a trusted tax pro and, as an earlier comment stated, not worrying is priceless.

    In 2008 I moved twice and owed state income taxes in 3 states and 1city. In 2009 there were capital gains, depreciation, and some other self-employment issues to deal with. The $250 fee for a good accountant is an expense I will never regret.

  81. Kjirsten says 29 February 2012 at 09:51

    I had a rude surprise this year when Turbo Tax (which I’ve used for the last three years) told me I had deferred payments on income from previous years to this one. Whoa – What?? Sure enough, in looking back over the forms for the last two years, which I should have checked before E-filing naturally, I found this crazy check box buried in the middle of lots of text. I had sold IRA shares in small chunks (and then converted to a Roth) to make the tax burden less painful – paying taxes over several years. This was on purpose, but the software had made sure I “had the largest possible return” for me, totally reversing all my planning. Grrrr!!! And I can’t blame anyone but myself for not looking thru the fine print before clicking “File.”

    The years I bought and sold my first house, moved for a new job, and took the down payments out of my investments, I hired a CPA and they were great!

  82. Meep says 29 February 2012 at 09:52

    I used TurboTax for the first time this year and it was pretty simple and easy. Previously I used H&R Block but was really angry last year when their advertised special made it look like it would be free/cheap, but the bill was suddenly over $200 dollars because of less than a dollar of interest on a money market bank account. Doing it myself is far better than being surprised with a huge fee.

  83. Jacob G says 29 February 2012 at 10:09

    I’ve been filing my taxes online pretty much since I started having anything worthwhile to file late in high school or beginning college. At first I used H&R Block (it was recommended, and very cheap at the time as online systems were just beginning to spread), but when I found out that State Farm, who I have accounts with, has an agreement with Turbo Tax for completely free “Deluxe” tax filing (including state) for its customers, I switched to Turbo Tax and have been with them ever since.

    Still being rather young and not near high income, my tax situation is rather simple and it’s a breeze for the most part doing them on my own. However, like others here, as I advance professionally my situation is getting gradually more complicated, and I have a feeling that especially by the time (if it happens) I start itemizing deductions, I’ll probably pay someone to do it.

    That is surely just one of the consequences of getting rich slowly! 🙂

  84. Tracy says 29 February 2012 at 10:43

    I’ve used an accountant since I bought my house. I think I was paying around $100 or so until moving to a different state for half a year and having my house a rental (and I had a few 1099s). That year I paid $325, but he got me every deduction possible. Before getting married I told my husband we’d be using the accountant. I used to watch him spend time over weeks sweating the tax process, and it was just too complicated. We paid $765 last year which seems high but I think well worth it. He reviewed my husband previous returns and found major red flags in his returns (turbo tax and tax act) that I’ve got my fingers crossed we don’t get audited for. I don’t think we will pay that much this year since I’ve taken over all bookkeeping for my husband’s freelance work and our rental property. I think it’s worth paying for the accountant for peace of mind and to save our sanity.

  85. sarah says 29 February 2012 at 10:55

    I’d be interested in hearing from someone who found that a CPA got them a better refund than TurboTax/etc. I use TurboTax and my taxes are somewhat complicated (for example, this year we lived in 2 states, I ran a sole proprietorship in both states, my husband was a student, we rolled over 2 401ks and made qualified IRA withdrawals).

    I wouldn’t mind paying someone if I thought they would get me more money, but TurboTax seems very thorough and in all my reading I’ve never come across a deduction I think they missed.

    • Bryan says 16 November 2012 at 12:23

      I make that exact offer to my clients. I have them bring in their TurboTax (or any other software) prepared return. If I can’t save them at least the difference between my fees and what TurboTax costs, I tell them that they don’t need me and that they are capable of doing it themselves. I find that on average around 80% of the people either substantially overpay or grossly underpay.

  86. HWolf says 29 February 2012 at 11:08

    We use a professional tax preparer. My husband is self employed and we have investments that are too complicated for me to sort through. I don’t want to spend 15 hours trying to do it myself and perhaps missing a few deductions or making a mistake. It’s well worth the money to have a pro do it–and I can spend that time saving money in another aspect of my life.

  87. SmartMoneyHelp says 29 February 2012 at 11:26

    Good information. I wait till there is a sale on H&R Block Federal & State with free eFile. It usually runs me around $25 each year.

    This year I got it for $25 again in January. posts the tax software deals.

    I go with tax software because its easy and quick. I would be worried to do it all by hand and make an error that would cost me. Plus the time that would go into doing all that.

  88. SmartMoneyHelp says 29 February 2012 at 11:27

    Good information. I wait till there is a sale on H&R Block Federal & State with free eFile. It usually runs me around $25 each year.

    This year I got it for $25 again in January. posts the tax software deals.

    I go with tax software because its easy and quick. I would be worried to do it all by hand and make an error that would cost me. Plus the time that would go into doing all that.

  89. tboofy says 29 February 2012 at 11:34

    I used to do my taxes by hand on paper. When I moved in with my parents, I started using my dad’s professional tax preparation software, but I kinda missed knowing “why” I was getting a certain amount in deductions. It does require some trust in the program, but mostly I enjoy accounting and doing taxes. The last two years I’ve done TaxAct online and have been very happy. I do their free 1040 filing then take my AGI numbers over to my state website (Utah) and submit that information online free.

    My taxes are not too complicated, though I do have a small side business that I’ve gotten a little bit of a business loss from the last couple years and am getting a depreciation on some equipment. TaxAct walked me through the process better than the professional software had, and I’m happy with the results.

    That said, I ENJOY doing taxes. If mine were any more complicated or if I didn’t enjoy doing them, I’d take them to a professional in a heartbeat. Not to H&R Block, though; I haven’t heard good things about them. I’d go to a CPA (which H&R Block employees definitely are NOT).

  90. Wendy says 29 February 2012 at 12:01

    I’ve gone back and forth over the years- when I was younger it was pretty straightforward with only W2s and minimal interest income. Then, as I started investing and purchased a home I started going to H&R Block and was quite satisfied. However, as I started investing more, and dealing with workplace stock options, ESPP, RSUs etc. I realized it was just as much work getting all the information together to provide to the tax accountant, so I started using Turbo Tax 4 years ago with no issues. No matter what method you choose, you are still on the hook to provide accurate information to the “preparer” and review your return. Most of the “peace of mind guarantees” have small print that only applies if they make a mistake.If you provide incorrect infomation or omit information and you get audited, you’re on your own to consult an attorney.

  91. Ace says 29 February 2012 at 12:15

    I think people are putting a little too much stock in the “audit protection” offered by H&R Block and others. This is more accurately described as “audit support.” In other words, if you get audited, they will make sure they saved a copy of your return, provide you with a 1-800 number you can call with questions, and give you a nice shiny brochure that talks about IRS audits.

    Need an attorney? Hire one yourself (though they will be happy to make a referral). Turns out you underpaid? It’s coming out of your pocket. Get hit with a penalty? You’re on your own.

    The only “guarantee” they provide is against mathematical errors generated by the software or themselves. If you gave them the wrong number or claimed something you shouldn’t, you are on your own.

    My advice: self-educate and do your own taxes (knowing the risk but pocketing the savings), or hire a real CPA. H&R Block people are usually just high school graduates who input your data into a computer program that’s just like TaxCut (or others). If you think that is “protecting” you, you are in for a rude surprise if you ever get audited.

  92. azphx1972 says 29 February 2012 at 12:35

    This is just my own experience, and my tax situation isn’t that unique, but I’ve been pretty happy with cheap tax software. I use TaxCut (now H&R Block at Home), and have managed it to get it for free or extremely inexpensively via SlickDeals for the past several years.

    When my tax situation was more complicated (and I had to file in 3 states due to consulting work), I hired a family recommended CPA to do my returns. I double checked his work and found some mistakes that necessitated me having to redo them, so I don’t buy the notion that you always get what you pay for.


  93. Kristen says 29 February 2012 at 12:54

    I did our taxes back when we were both employed by other people and had an out of state tax return (live in Washington, worked in Oregon) with itemized deductions. Then hubby started his own business. Depreciation on equipment, payments on a non-compete agreement… I barely UNDERSTAND our tax returns anymore. We pay an accountant a lot of money each year to do the business and personal taxes, but I would have no confidence in doing otherwise.

    • Queeb says 29 February 2012 at 17:08

      My father-in-law owned his own business and did his own taxes to “save money”. At some point after a few years of that he had to consult a CPA on his taxes and was told he had been doing some things wrong. The CPA reviewed and refiled on some previous years and was able to get my father-in-law more money he had been entitled to.
      I have no trouble paying a person that knows what they are doing.

  94. Krantcents says 29 February 2012 at 13:31

    I have my CPA prepare my taxes. I have used him for 25 years. I generally create a spread sheet and fax the information to him along with the W-2s, 1099’s etc. In the long run, it is cheap money because I can ask him questions during the year for free.

  95. Brigitte says 29 February 2012 at 13:37

    I did my and my partner’s taxes using TurboTax free edition online. Unfortunately, I didn’t buy the audit protection and since we filed my partner received a W-2 that we weren’t expecting, postmarked on February 8th.

    I went into TurboTax and it says we will have to file by paper. We can update the forms and print them and send them in, my partner only got an extra $50 on the return and we haven’t spent it all yet so it’s fine… I’m just worried about what happens if we get audited. (My tax returns of course won’t be included since we’re not married, but it’s still a hassle.) I guess I’m wondering if there’s any way to tack a note on that says “HEY! Sorry this income didn’t get included, it wasn’t earned in 2011 therefore wasn’t expected AND was late from the company, oh so sorry, promise it wasn’t intentional, please take this money.”

    • ritz says 29 February 2012 at 15:37

      You need to file a 1040X with the additional W-2 income. File by April 17 and there will be no penalty and no need to worry about an audit! It’s unlikely they would audit you over that though, they would probably just send a notice saying that you left off $50 of income and asking for the additional tax, interest and penalties.

    • Leah says 01 March 2012 at 06:00

      What Ritz says — don’t worry at all. Just file an amended tax return and pay any difference. I work for lots of different places, and two different years saw me not getting/forgetting about a W2. You only get dinged if the IRS catches the mistake after mid-April.

    • Larry says 07 March 2012 at 22:12

      I agree with ritz and Leah. File an amended return (Form 1040X) on paper and rest easy. Don’t forget to file an amended state return as well.

      I have a question about what you wrote: “it wasn’t earned in 2011 therefore wasn’t expected”. When was it earned? If it wasn’t earned in 2011, it generally doesn’t go on the 2011 return.

  96. Ace says 29 February 2012 at 14:04

    Brigitte –

    This is a fairly common thing, and no need to worry. You just need to file an amendment to your return ( This process has its own form. DO NOT just correct and resend the original return. That will screw things up.

  97. Grad Student says 29 February 2012 at 14:17

    I do my taxes by hand. If you are filing an 1040EZ, there is ZERO REASON WHATSOEVER to purchase software or pay anyone for the federal taxes. It takes about 10 minutes.

    The first time I did my own taxes, I educated myself on how they worked and what different tax situations were. The IRS has a useful tutorial site with simulations and once I did all of them, I had a good understanding on how things worked.

  98. JM says 29 February 2012 at 16:00

    I do my own taxes, but I am a CPA. 😛 However, my husband did his own taxes before we even met, and I did mine before I became a CPA. We don’t really have very complicated taxes to begin with.

  99. Joe M says 29 February 2012 at 16:01

    I always do my return in two different tax preparation software packages to try and catch errors. It seems like one package will always have some sort of small problem that shows up obviously in the other. Asking the same questions in different ways also seems to jog my memory about some deduction I forgot about. For the past few years I have done my taxes in both TurboTax and TaxAct (both the online additions) and filed with TaxAct because it’s cheaper. Don’t worry, the second time you type your taxes into a tax preparation program ends up being much quicker than the first time through.

  100. Susan says 29 February 2012 at 16:01

    For the first 14 years of my marriage I did our taxes. Then we had a complicated situation come along–we were selling my grandmother’s house that was left to myself and one sister, but wanted to include the third sister who came along after the will was written, and I also needed to be paid back for expenses related to upkeep of the house. We started with an accountant that year, and for the last 4 years he has done our taxes. We pay $150 and I must say for me it has been very freeing letting someone else worry about getting every little detail right.

  101. b says 29 February 2012 at 17:15

    I do it on free online TurboTax and also by hand, and usually end up filing the by hand version because I’m cheap. I’ve learned more and understand it better after going through the instructions manually, but TurboTax has caught a few errors here and there.

  102. Queeb says 29 February 2012 at 17:19

    My father-in-law owned his own business and did his own taxes to “save money”. At some point after a few years of that he had to consult a CPA on his taxes and was told he had been doing some things wrong. The CPA reviewed and refiled on some previous years and was able to get my father-in-law more money he had been entitled to.
    I have no trouble paying a person that knows what they are doing.

  103. Sara says 29 February 2012 at 17:44

    I have used TaxAct online for the last several years because it has no income limit for the free version, and the free version allows you to itemize deductions. My state (Ohio) has free electronic filing on its web site.

    At the beginning of each year, I make a new file folder for all of my tax-related documents and receipts so I know where to find everything when I need it. I also keep a running checklist of all the forms I should receive (W-2, 1098, 1099’s) and add to it if I open a new account. I can knock out my federal, state, and local returns in just a few hours, so I don’t really feel like it’s worth it to pay someone to do it.

  104. Joe says 29 February 2012 at 17:58

    When you compose a list of Canadian solutions, let me know. I wish we had half the tax breaks that Americans have. Write-offs on mortgage interest and mileage for volunteer activities?? Paradise.

    • Steve says 29 February 2012 at 18:15

      The huge and seemingly random list of write-offs and exceptions is what makes our tax code so complicated.

      • PB says 29 February 2012 at 21:11

        Absolutely. My mother’s birthday was January 1, and the year she turned 65, she got to take two deductions for herself. Explain that in a rational world.

  105. Steve says 29 February 2012 at 18:14

    This article was interesting, but doesn’t really help me decide how to do my taxes. Has anyone done multiple options for the same year, and had them come out differently?

    • Amanda #2 says 29 February 2012 at 18:29

      You could take your return to 10 places, CPAs, H&R Block, Software and I bet most of them would come out different. =)

    • CS says 27 April 2012 at 12:17

      Steve, I realize you posted your comments months ago but wanted to address your post – this will be a long one… I have done my taxes two ways for the past 6 years — first by hand and then using Turbo Tax. I have always found TurboTax to come up with the same exact numbers and refund/amount owed as I found by hand and generally trust their product. That being said, there were a few times this year and in the past when their numbers didn’t match up with mine, and that is because of improper wording on the state tax forms which TT (like so many other online sites) just doesn’t put as much attention to. In general, I find Turbo’s interview questions for the federal forms to be most accurate as much of what they ask you is exactly what you’ll find on the official IRS tax documents (but much easier to understand), but if they or another software word something weirdly you can miss out on deductions you otherwise deserve. This is where doing taxes on your own and learning the tax code, as annoying as it might be, will come in handy as I was then able to go back into the program and get the numbers to match up. If you don’t have time to do this on your own, then I would say go to a tax pro but like anything do your research and make sure they have a good reputation as this article suggests so you aren’t putting your tax info into the wrong hands or someone who just doesn’t care enough to get you your proper refund.

      This year, I also used TurboTax’s new online chat and phone service which is free to all users and even if you choose not to file your taxes with them. They were very helpful with some situations and sometimes not so much but it taught me something new: go with an EA, which means the individual went through the most testing and is the highest authorization for a tax pro (even higher than a CPA). Sometimes I disagreed with what the CPAs on TT suggested, but the EAs there were always 100% accurate and gave me the answers I needed quickly and efficiently. Actually, if TT hadn’t raised their prices and if I didn’t have to file taxes in two different states this year due to working in two states, I would have gone with them. But their prices rack up if you file a federal plus two states. So this year was the first time ever that I did not use Turbo Tax — but only because of financial reasons. Having tried out four other options this year, I have to say TT is still by far the most accurate and user friendly.

      Additionally, Steve you asked another person to post if they had compared different softwares. I actually have. Since this year my tax situation was more complicated (I had capital gains plus moving expenses for my spouse’s job and had to file in two states for the first time — none of which we’ve dealt with before), I checked multiple options to ensure we were doing our taxes right. After using TT and filing by hand, I also went to a local H&R Block, using their Free Second Look service in which they look over your current or past year’s tax forms to see if you missed anything — this service is free. They also got the same exact numbers I already had found on TT and by myself, BUT only after I disagreed with the agent on a few points and she looked it up and realized I was right and knew more about the specific tax rules on that issue than she did (again only because I had done my research and read the tax code before; she then offered me a job lol). So essentially, they just plug in your numbers and as she said “rely on their computer” to find all your eligible deductions. But if they input something in the wrong field, they too can overlook something. So I would have to tentatively agree with what others here have said about H&R Block just because my person was knowledgeable, but would have made a costly mistake if I hadn’t urged her to look again at a few forms.

      Aside from H&R Block, I also saw a tax pro who specializes in my line of business to get another opinion. After looking over my tax forms, he gave me valuable advice that neither TT or H&R Block had: that because this year I had both W2 income and 1099 income for my business as a sole proprietor, I would need to split my expenses between the two incomes and report some on my Schedule C and some on a Schedule A. In doing research on my own, I had only come across this issue once online and didn’t realize it applied to me. So going to a tax pro who knew what he was doing was extremely helpful as I learned something new that I will need to do for now on. In that process I also learned that the going rate for tax pros seems to be about $200-$250 to file everything (including your state taxes and federal forms, no matter how complicated your tax situation) and this applies to both NY and CA — by the way, the lowest phone quote per this article for CA says $50; would be curious to know who that was as everyone quoted me much higher but maybe that was for a 1040EZ return and I was filing a 1040. For my fairly complicated tax situation this year, I received around the $200 quote from three different sources; a friend of mine sees a tax pro every year and has a much more simple tax situation than mine with only one W2 and is single, and she was quoted $150. Turbo Tax this year, with filing two state returns plus federal, would have cost me approx. $130 plus another $40 for their audit support so $170 total — which was almost as much as just going to a tax pro. This is why I chose not to go with TT this year despite still using their software to double check my numbers.

      Because I needed to file in two states, I looked up all my options to find some software that didn’t charge upwards of $20-40 per state as to me that seemed ridiculous. So I guess you can say I turned to the more reputable cheaper software sites that allow you to just file state-only returns as I was planning to prepare my federal return by hand, given that I had to also include a statement showing how I allocated expenses between a Schedule C and A. See? Very complicated this year.

      I tried out (On-Line Taxes, Inc.) and OnePrice Taxes. Both were priced similarly but while OnePrice Taxes had a more user-friendly interface closer to TurboTax, the site lacks customer service and aren’t as quick in responding to emails — they say they have a chat option but every time I clicked on it, I got the message “Sorry, we’re not here right now but send us an email” – I sent them two emails and got no response to either (believe me, I checked my spam messages and nada). I also could not enter interest from a government bond on their website as it says it is “not supported,” yet nowhere on their site, prior to my signing up, does it tell you that you can’t enter that data. A bit of a let down actually. So despite the good PR on OnePrice Taxes, where everything on their site is advertised to be the same price, I ended up using OLT, which has free customer service via online chat or phone, just like TurboTax, supported everything I needed and was also fairly quick and easy to use. I found just two glitches in their software where info wasn’t automatically transferring over to my forms (problems I didn’t experience with TurboTax), but I do have to say within 24 hours OLT had the issues fixed and were prompt in sending me an email to correct the problem. And both of those glitches had to do with the state forms, which again, from my having tried out several online software programs, I found on all of them — including the godly TurboTax — that the questions asked for the state forms are not as specific and if you don’t read the actual state instructions yourself, you could potentially miss out on situations that apply to you or input the wrong info. This is where a service like OLT’s or TurboTax’s free chat or phone support helps you out, for you can inquire exactly what a specific question is asking for and ensure you are entering in the correct amounts.

      Overall, I would say go with whatever option seems best to you but always do your research. By comparing different sites/resources and going to a tax pro in person, I was able to maximize my refund and ensure I was doing everything right. I also learned a lot about taxes in the process and things to look out for in the coming years. For instance, by my having prepared my taxes through TurboTax last year, I knew this coming year we would stand to claim a moving deduction as the move was for work. I wouldn’t have known that option existed had I not prepared my own taxes and thus learned that this particular deduction existed. I know I was crazy to try so many options but I found that all these tax comparison sites just didn’t delve into each process deeply enough for me and I am the type of person that has to learn for myself. So I hope by my sharing this info here, it is at least helpful to some.

      Bottom line, in my opinion the best user-friendly software out there is TurboTax but they can be expensive. Tax pros are good but only if you trust them. If something seems iffy, walk away. H&R Block has a lot of mixed reviews out there so be wary. Turbo also has some negative reviews, but I’d bet those are from people that didn’t input their info correctly and didn’t realize that TT has the free resources in place to help you — both through their software itself and the extra tools of free chat guidance. If you do all that, the software itself works and I can say this firsthand having used TT for 6 years and I’ve never been audited (continuing to knock on wood). OLT is a great alternative if you are looking for something cheaper — but if you need more guidance within the software itself and something more user friendly, than go with TurboTax. One extra cool thing about OLT: they are the only online software program I found — and I looked into at least four other options than the ones I mentioned here — that allows you to include a personal statement with your federal taxes. So if you’re someone like me who has to include a supporting statement showing an allocation method or something else you think will be helpful for the government to know, OLT will allow you to type one up and efile it with the rest of your return. I wish I had known this before as I had already filed my federal forms by hand, which will now take more time to get my refund. Lastly, can’t vouch for OnePriceTaxes as I ended up not using them.

      • Steve says 27 April 2012 at 15:22

        Thanks for the excellent and detailed writeup!!

        It seems to me that if you have to do your own taxes by hand anyways, paying someone (or something) else to do them too kind of defeats the purpose. But then again, “Nobody cares about your money more than you do.”

        I am lucky in that my state does not have an income tax. Numerically it makes some sense that state taxes are more expensive – the biggest cost is developing the software, and that cost only gets spread across 1/50th of the population. It’s not quite that simple (since some costs are the same, e.g. advertising; and most state forms/tax codes are simpler; and not all states have income taxes and some states are bigger than others).

        I spend only about $15 per year on TT (Basic edition with 25% discount code). Still, the layer of abstraction between the tax code to TT software writers to me is disconcerting and confusing sometimes.

        Someone told me that the difference between TurboTax and an accountant is that TT plays it safe on deductions because they have so many people who would sue them if it goes wrong, whereas an accountant would be more agressive because a) s/he is taking the time to actually understand the situation and can be surer the deduction is legal and b) the client is probably only going to come back the following year if the accountant got them a higher refund.

        • CS says 27 April 2012 at 22:30

          I think one year I used Turbo to do my taxes first and then did it by hand anyway to double check. For me, it’s about ensuring that the product is doing its job properly so I don’t mind doing it by hand also, and probably would still do that even if I was paying a tax pro to file my taxes. Using a software gives me the benefit of e-filing as there is nothing better than peace of mind in getting your confirmation in 48 hours. But that’s just my preference. I wish my taxes only cost $15. I use the 25% discount as well but it is more expensive since I file for two people. I look forward to next year when I go back to only filing one state!

          As for whether Turbo plays it safe with deductions I wouldn’t necessarily think so. I agree with whoever posted here who said that the software found them additional deductions than a tax pro did. When I went to H&R Block, the person tried to convince me I might be eligible for a deduction I knew I was ineligible for. And when I put in my info to TurboTax, it automatically told me that deduction didn’t apply. I think if you use the software and answer the questions exactly as they pertain to your situation, people should come out exactly where they should be. It’s only when questions are worded in a confusing manner that you run into problems — and for that reason I hope it wasn’t just a fluke and TurboTax and the other software programs keep offering free chat in future years and the ability to talk with a live CPA or EA as that was most helpful for me. That one-on-one service almost makes using the softwares a no brainer for me.

          But this blog has been most helpful – next year I am definitely checking out Slickdeals!!

  106. Amanda #2 says 29 February 2012 at 18:26

    If you have a W-2; 1099-R; 1099-INT; 1099-DIV I suggest free/cheap online software!

    If you feel the need to go to a professional–go to a PROFESSIONAL! Professional designations are CPA & EA.

    I think EA’s can work under an H&R block name. However, make sure they’re doing the work, not someone who is preparing taxes as a 2nd job off the street. It’ll normally be a home office or small office if they work this way.

    H&R Block/Liberty Tax/Jackson Hewitt type places are a rip of in my estimation. They make too many mistakes. Especially if you have a small business. Also, if you walk into an H&R block type of place and purchase their “gold guarantees” or other liability packages they will pay for their mistake (tax, interest & penalty) but you get a 1099 for it the next year and pay tax on the amount.

    As far as audit protection goes even if you have a CPA the audit isn’t free.

    CPA’s have liability for errors they make. If it’s their error they’re supposed to pay for the interest & penalty. A nice CPA will pay for the error too. If it’s your mistake(i.e. forgot to bring in a form) they might correct it for free but you owe the tax, interest and penalty.

  107. Rachel says 29 February 2012 at 20:41

    I used freetaxusa this year. Liked it. Was able to do everything I needed to for our family (adoption credit, deductions, charitable donations, etc.). It didn’t take too long. Then I used it to proof check my state taxes – I do state taxes by hand to be free. As a stay at home mom with just enough extra time, it’s definitely worth it to file taxes for free. Tax fees aren’t in our budget. 🙂 I do prefer turbotax for how dummy-free it makes everything. I never worry that I’ve missed something when I use turbo.

  108. Steve says 29 February 2012 at 21:04

    If you are going to start a business, I strongly recommend “penciling” your taxes by hand, before you open your doors. READ the regs, do the paperwork, do the whole drill. KNOW the tax code!

    If you don’t, you soon will not be in business!

    The tax code is one of the core components of any business, and the key component in all of your bookkeeping. If you know what to track and categorize up front, taxes aren’t that hard – well it’s the difference between heck and hell! 🙁

    • Amanda #2 says 01 March 2012 at 13:32

      An accountant’s nightmare is when the client comes in and says, “guess what I did” after the fact. You can save a lot of money by doing the tax research or calling your CPA BEFORE making a decision that you don’t know will affect taxes.

  109. Paula says 29 February 2012 at 21:06

    After being self-employed for 37 years, I find that my CPA is the professional that I trust to do my tax returns. We have never been audited and get expert information which helps us with financial planning.
    Our current CPA has helped us by eliminating qurterly estimated tax payments and we now get a small refund check each year.
    Should we be audited, our CPA would represent us. She is easily worth what she charges us for our tax returns.

  110. Austin says 29 February 2012 at 21:24

    There is a free version of H&R block online for both federal and state if you made less than $57k at

  111. NolaManBlog says 29 February 2012 at 22:00

    I’ve used TurboTax for the past two years and I have received what I thought two decent refunds. After speaking to a friend of mine who showed me his $5300 federal and $700 Louisiana state return, I was perplexed (He belongs to the electrical union) Perhaps, I am going with the wrong tax preparer.

    • Sara says 01 March 2012 at 07:22

      Your friend got a higher refund than you did because he overpaid his taxes by more than you did. If your goal is to get a big refund, you can get a W-4 form from your employer and request some additional money get withheld from each paycheck. I don’t actually recommend this because it’s giving the government an interest-free loan, but my point is that the amount of your refund has little to do with your tax preparation method and everything to do with the amount of tax that is withheld from your paychecks throughout the year.

  112. Aurora says 29 February 2012 at 23:23

    I have been doing my taxes with Turbo Tax for four years. Last year I decided to use HR Block software as well as Turbo Tax and HR Block gave me a much higher return. This year again HR Block gave me $2000 more than Turbo Tax. So I would have to agree with the person who said that “software algorithms are geared toward keeping the company out of disputes”

    • Amanda #2 says 01 March 2012 at 13:39

      Sounds like you need to talk to a CPA!

    • Steve says 05 March 2012 at 16:33

      Why was H&R blocks higher? Can/will you share what the overlooked deduction or credit was?

  113. Ian says 01 March 2012 at 00:24

    How different are the tax systems between the United Kingdom and United States.

    I live in the UK. Most people here don’t need to do a tax return (payroll taxes only) and for those that do the tax paperwork has been getting simpler year on year.

    Just wondered if US taxes have been allowed to become overcomplicated.

    • Steve says 05 March 2012 at 16:39

      In theory, everyone wants to simplify the tax code. (Even many accountants and the IRS!) In practice, whenever somebody proposes eliminating some deduction or other niche that benefits a particular group, people start flipping out. That includes people in that group, people not in that group that dream of being in the group someday, people who never expect to be in that group but are afraid it’s one step towards eliminating their niche benefit of the code.

  114. Ms Life says 01 March 2012 at 02:40

    I work for an international organizatiion and so do not pay taxes. That’s nice for me but I don’t think that’s good for my Government!

    • Amanda #2 says 01 March 2012 at 13:41

      Every US citizen must file a tax return. You’d better talk to a CPA! It doesn’t mean you necessarily owe tax.

  115. Earn Save Live says 01 March 2012 at 04:16

    Since I started my first full-time job, I’ve used a wonderful CPA in my home state in the US. Over the years, he’s seen me get married, have a child, buy rental property, go to school, and now, move abroad. I’m grateful for his expertise!

    All US citizens who live abroad are required to file tax returns in the US. The first $92,000 of overseas income is excluded from US taxation, but after that it gets complicated. We’re working on our taxes now, and I’m glad that I have a qualified professional who knows the US tax laws inside and out.

    Has the fee for his services increased over the years? Yes. But our tax situation has grown increasingly complicated. I trust his expertise – and that’s worth the expense!

  116. Kyle says 01 March 2012 at 10:22

    I would much rather go to a CPA. Mine is 90 dollars total for state and local, which is a fine price to me and well worth the piece of mind. Plus, this year because I just got married he gave me an hour long tax planning session for no charge as well.

    • Amanda #2 says 01 March 2012 at 13:43

      The price is not usual.

  117. Trina says 02 March 2012 at 05:46

    The year my partner and I bought our first house, over 10 years ago, we took our taxes to a CPA because we weren’t sure how to do them. She charged us $250 each, and then didn’t give us one of the forms we needed to file. When I called her to ask about it she was very unpleasant and said I must have lost it. Since then I have done our taxes using TurboTax (for me, since I don’t qualify for free tax filing) and H&R Block online (free for my partner). In the meantime we’ve had a baby, adopted a baby, changed jobs, bought and sold two houses, and I’ve never had any trouble with the software.

  118. Jeffbo says 02 March 2012 at 11:55

    I’ve done my taxes online for years without a problem. It really depends on your situation. Mine is pretty typical — salary with W-2s, investment income, some unemployment benefits, health and education expenses. I use standard deductions, have a wife and kid.

    I’ve used Turbotax, TaxAct, and FreeTaxUsa the past few years. All are easy to use, walk you through all the steps, and cost $10-15 for state and federal e-filing. Only takes an hour or two.

    I once paid an accountant $100+ to do my taxes — I’d just gotten married and bought a house, and wanted to make sure I wasn’t missing anything. Money wasted! I could have easily gotten the same results online.

    Most Americans have situations similar to mine, or even easier. You don’t have to be a tax code expert, because the online software walks you through everything. And you can try any of the online programs for free — you don’t pay until the end, so if you’re uncomfortable with the process, just shut it down!

    Unless your situation is complicated I believe the expensive help is not needed. Keep that money for yourself!

    • Steve says 05 March 2012 at 16:44

      That is what I am afraid of. I own a house and stocks but really, there is only so much an average, wage earning person can wring out of the tax code. I can enter data into a computer program as well as the next person.

  119. Josh Brandt says 18 March 2012 at 18:46

    For a complicated return, $750-$1,000 is average.

  120. Frank Hagan says 01 February 2013 at 17:05

    You don’t really know what deductions you are missing when you DIY; there are few Youtube videos from news stations with comparisons using different preparers and software like TurboTax. The DIY approach ended up with the refund $800 less than the true refund due the tax payer. If you decide to go the DIY route, it makes sense to have someone look them over every three years – you can still file amended returns then. After three years – congratulations, the IRS keeps your money.

  121. AMW says 05 February 2013 at 04:55

    I did my own taxes until about 8 years ago. Then I was audited. They found nothing wrong with our tax return but the process was far too stressful. Plus, my husband and I we have 2 W-2s, 2 businesses, and a bunch of 1099s. This makes for a complicated return. Paying for a CPA is the best money I have ever spent for my mental health. Unless I go back to the 1040EZ, I will be paying for someone to do this for me.

  122. LD @ Personal Finance Insider says 05 February 2013 at 04:57

    I have prepared hundreds if not thousands of tax returns during my lifetime. I would agree that there is no one size fits all when trying to determine whether to pay a preparer or use software.

    I would recommend though that those with highly complex tax affairs use an appropriate tax professional. I see people all the time with complex tax affairs who tried to do it on their own, messed up, and then have to pay a professional to get them out of their mess.

    Conversely I think those with very simple tax affairs could easily prepare their own taxes using software rather than paying a preparer.

    It’s more of a toss up for those in between.

    • Mrs PoP @ Planting Our Pennies says 05 February 2013 at 06:04

      I used TaxAct for years to do ours, but when our finances started getting too complicated (investment properties, etc), we chose to hire a professional to make sure we were getting the best advice.

      It’s not cheap, but the peace of mind is well worth the price in our mind.

    • Ann says 05 February 2013 at 07:36

      We have an apartment in the upstairs of our house (that we’ve been restoring for 15 years), multiple states and multiple 1099s. I found that by the time I organized all the information for the preparer, I might have just as well put it in the tax software and done it myself…which is what I do now. I love that TurboTax tracks all the depreciable items, but I do feel “stuck” in that I don’t dare change programs and lose the depreciation records.

      • LD @ Personal Finance Insider says 05 February 2013 at 07:54


        If it helps, a tax return generally has all of the information you or a CPA would need to be able to prepare the following year’s tax return, even if you choose not to use the same software.

        However, depending on your particular return, it can be a little tricky knowing what information should be carried forward from your prior return onto the current return. As you indicated, you normally don’t have to worry about this if you always use the same software.

  123. Jane Savers @ The Money Puzzle says 05 February 2013 at 05:21

    I have to use an accountant because of the conditions of my divorce. My sons are both in university and the accountant uses the boys tuition expense to reduce their income as much as possible then divides the remainder between myself and the boys’s father.

    I pay for the 3 returns of myself and my sons and I am charged $200.00 plus 13% gst (goods and services tax in Canada).

    I consider it money well spent but as soon as my sons are done school I will go back to completing my own return.

  124. Jon @ MoneySmartGuides says 05 February 2013 at 05:22

    Great analysis. I agree that one size does not fit all. I’ve used online software to complete my taxes myself over the years because I follow the tax code closely for my job and my tax situation is easy. However, now that I am getting involved in rental real estate, I am considering using a tax pro. One because as my taxes become more complicated, it will be easier for me to make a mistake and two, it will be less of a time commitment from my end.

  125. John says 05 February 2013 at 06:35

    I have been using a CPA for about 15 years. My wife will tell me nearly every year she can do the job just as well as the CPA. Every year I let her try and then take it to the tax person. Every year the pro finds lots of extras turbo tax and my wife miss, usually thousands of dollars of extra. I keep getting my taxes done by the pro.

    • Johanna says 05 February 2013 at 11:28

      I find this really hard to believe. What are examples of some of these “extras”? Are they the same things that keep showing up from year to year, that you and your wife could keep track of so you could get it right in subsequent years? Or are you actually saying that EVERY year you have thousands of dollars of NEW deductions/credits/etc. that TurboTax misses?

      • Wendy says 30 November 2013 at 09:02

        I am a CPA and I can tell you that you don’t know what you don’t know. For example, in Massachusetts we have a $5,000 credit for installing a new compliant septic system. It’s really easy to miss – how often do you discuss your septic system with your accountant? But if I hear them say something like, “we sold some stock because we were fixing up the house to sell” I’d ask that next question.

        A huge one that is routinely missed have to do with education credits, and lots of people miss daycare credits for summer camps. We also have a number of ways to save on the state return that only someone versed in MA taxes would catch.

        I am worth my cost.

  126. Jen @ SVPerry says 05 February 2013 at 06:49

    We have done our taxes with TurboTax for years and it has worked out well for us (we think). We rented out part of our house and the Deluxe version was fine, although I used to be an attorney and took a tax course to do volunteer work so I may be in a different boat than some. Last year we sold our home and we are considering using a real tax preparer due to the complexities of selling a home that we partially rented.

    I will say that when I volunteered to do taxes for lower income people, we saw a lot of returns that were very questionable. Some preparers have just taken a course and aren’t necessarily that knowledgeable or careful. Also, a model based on the percentage of your refund might have the wrong incentives for some preparers. Maximizing a refund is well and good but it’s your return and if there are problems you are the one on the hook.

  127. Phoebe @ says 05 February 2013 at 07:40

    We’ve used Turbo Tax and while I think the Federal version is great, I have been disappointed with the State versions (on some steps the actual tax forms appear and you can enter values – how is that helpful?).

    I’m fine using it for now, but if my life becomes more complicated I think I’ll switch to a CPA.

  128. Johanna says 05 February 2013 at 08:18

    So, why not have some articles to help readers understand the changes in the tax code that might affect them, rather than reinforcing the learned helplessness here? This article reads like a paid advertisement by someone who stands to gain financially from convincing people that they’re too stupid to do their own taxes.

    • ImJuniperNow says 05 February 2013 at 09:32


  129. mike says 05 February 2013 at 09:19


    I know these are starting averages but living in the Philly suburbs these seem low. I started having my taxes done professionally in 2003 thru 2008 and never paid less than $300 at HR Block. One CPA wanted $500+. HR block charges you a basic amount then adds on additional money for each form. Now I also had 2 states but since 2009 I’ve done my own with the HR block deluxe which includes 1 state (which I buy on amazon for about $20 each year, goldbox deal early jan). Our taxes are pretty basic with w2s, schedule a, and interest forms, but I read through all the questions and have learned a lot about the convoluted tax code. Plus I also read tax articles regularly to make sure I’m not missing any deductions, which is hard to do anyway with the tax software. It took me 6 hours to do fed, 2 states, and local, so I guess it is also depends on how much your time is worth to you.

    • AMW says 05 February 2013 at 17:44

      I live in Ohio and my CPA charges $175.00 for (what I feel) is a pretty complicated return. I would pay him double but please don’t tell him that!

  130. Peggy says 05 February 2013 at 09:20

    The more you understand your taxes, the better you will understand your tax incentives, and be able make good financial decisions accordingly. This is especially true for small businesses and young adults.

    • Johanna says 05 February 2013 at 11:59

      It’ll also make you a more informed citizen. Remember those commercials that implied that raising the tax rates on capital gains and dividends would eat away at your retirement savings? For the vast majority of people, that’s BS: If your retirement savings are in a 401(k), IRA, or other tax-advantaged account, you’ll never pay capital gains or dividend taxes on them.

  131. ImJuniperNow says 05 February 2013 at 09:30

    I have not done my own tax returns for over 20 years. And not just because I have a rental property, many 1099s and an LLC.

    I am not an accountant. I am also not an electrician, plumber or roofer. I believe in leaving these things to the experts.

    The couple of hundred dollars my CPA charges me to prepare my returns frees my time to do the things I am good at. Most importantly, it gives me peace of mind.

    Like the commercial says, it’s priceless.

  132. Alexandria says 05 February 2013 at 09:47

    As a tax preparer – it is rare that I have seen someone knowledgeable enough to cost effectively do their own taxes. (Of course, not talking about 1040EZ, but even those are easy to miss some of the recent deductions, as taxes get more and more complicated). I always say the whole point is to save our clients more money than we charge. The End. If not, you shouldn’t be hiring us (& this includes penalties if you do it wrong). I’ve had some clients leave who I thought could probably do just as well on their own, that came crawling back. One had some IRS issues, and then I caught a few mistakes and amended some returns for her. I was surprised, and made me appreciate the value we add for even the more tax savvy.

    Anyway, a good test, as some mentioned is to do your own taxes and see how they compare to a professional. If the professional is not doing anything you can’t do, then definitely drop them. But it wouldn’t hurt to get that second opinion once in a blue moon. You may be surprised.

    Finally, I do live in an expensive state and probably most of our fee is for the complex state tax returns. BUT, I find it hard to imagine anyone getting any quality at $100. UGH! Be careful what you pay for. I am not sure the average tax return preparer knows much more than average. Most of our new business these days is cleaning up messes left by other tax preparers – it has been really bad lately. I know it’s rough because you rely on a professional to make sense of the tax maze, and it’s really hard to guage if they know what they are doing. I do not envy the consumer. I appreciate that I am do my own tax returns. Phew!

    • Johanna says 05 February 2013 at 11:55

      Can you give some examples of things people commonly get wrong? I understand that this is your livelihood and that it’s unreasonable to ask you to perform a service for free that you normally do for pay. But one or two examples of situations people usually have trouble handling themselves would help us decide if it’s worth paying several hundred dollars to have a professional check our tax returns “just in case.” (For example, other posters have mentioned rental properties and side businesses as particularly tricky tax situations. Those don’t apply to me, but I do itemize deductions and deal with capital gains and losses.)

  133. Anne says 05 February 2013 at 10:13

    I’m on the other end of this discussion. I haven’t been able to take anything other than the standard deduction for several years. We’re retired.

    I’ve been buying a $40 Turbo Tax for several years but, thanks to this blog, have just learned I can do it free directly with the IRS.

    Too late for this year, but will definitely save that $40 next year.

  134. Stacey says 05 February 2013 at 10:40

    Another option is to take a tax preparation class from somewhere like H&R Block. I did that last fall – for two nights a week for three months, I went to an H&R Block office and learned pretty much everything I will ever need to know about preparing individual tax returns. The class cost me $249, but that means I’ll never have to pay anyone to do my personal taxes ever again, no matter how complicated they get, and as long as I keep up with changes in the tax laws, I should be able to prepare a perfectly accurate return for myself.

    • BD says 06 February 2013 at 01:41

      Or, if you’re a good self-starter and can learn online, you can take tax classes for *free* at the IRS site.
      They’re the same classes that the folks from VITA (Voluntary Income Tax Assistance) take.

  135. Paul says 05 February 2013 at 11:47

    I have been using the same person since 1980. The only reference I see in this article that I see that is incorrect is the amount charged. My cost each year runs between 600.00 and 800.00 dollars. I do have investments and rental property so I am going to assume the difference is because I live in Hawaii….after all, everything costs more here….(But it is worth it 🙂 )

  136. Alea says 05 February 2013 at 12:17

    Seven years ago (and very broke), when I finished doing my taxes it looked like I owed about $1,200 to the government. Desperate, I finally went to see a professional. I ended up getting a refund instead. He simply switched me from Single to Head of Household, (I take care of my elderly parents) and some additional deductions, and presto, each year I can count on a refund. Worth every penny.

  137. tracy says 05 February 2013 at 13:42

    I was as surprised as other posters about the low costs for tax preparation. My brother worked at a tax prep office for a while, and he basically just used their company’s version of TurboTax to fill out the tax forms for people and then charge $150. I want an actual tax professional, so we use a CPA.

    He charges more in the range of $600-800, but my husband and I have self-employment incomes, rentals, and have moved between states. When we got married I asked the CPA to do our joint taxes, and he looked over my husband’s taxes from previous years (he used software). He found major mistakes in how the software processed the taxes, and we are lucky now it’s been enough time that we won’t be audited on those years. He was significantly underpaying his taxes, so now we rely on the CPA. He also guarantees his work, so if we are audited due to his error, he covers a portion of the penalty (my mom also uses him and this happened to her).

    The other benefit is that I can email him and ask questions throughout the year. If I wasn’t a student, my husband wasn’t working, and we didn’t have a toddler, I might consider doing them on my own. For now I value what I am getting for my money and my time.

  138. Shakela says 05 February 2013 at 17:23

    Thanks for this article. I think I will be looking into different software than turbotax now.

  139. My Financial Independence Journey says 05 February 2013 at 17:47

    I use Turbo Tax. I’m not sure if it’s the most frugal option, but it gets the job done. And I’ve been using it since I was a teenager and got roped into doing my parent’s taxes one year because I was the only person in the house who could use the computer.

    If my financial situation ever becomes more complex, such as if I buy a house, then I’ll probably start working through a CPA.

  140. DonB says 05 February 2013 at 17:54

    I very much doubt if a tax preparer would save me money and certainly not enough money to cover their fee.

    I’m not a big account, and it isn’t worth the time of the accountant to take care with my account. They’re not going to find any magic savings because there isn’t any magic savings. I take the standard deduction and make sure I qualify for the Savers credit. But it isn’t that hard, and if I go to an expert I’m still going to take the standard deduction.

    I agree with the poster who said you’ll know it better if you do it yourself. I know exactly where my marginal rate is 15%, where it jumps to 22.5%, and where it falls back to 15%. I know where the Savers credit falls. Basically, I know before the year ever starts how much money I intend to “make” after pre-tax retirement contributions and I make things come out right.

    Do I wish taxes were simpler? Yes. Sure. Tax preparers don’t “make” anything. They don’t actually create wealth. If the tax system were simpler, they could do something useful that contributes to the wealth of us all.

  141. Wendy says 05 February 2013 at 19:31

    I prefer to do it myself. I have gone back and forth, but for the last 4 years I have done the taxes myself, using turbo tax premier. I’m a homeowner with investments,stock options etc. I still don’t feel that it’s worth a professional doing it, yet. If I were able to print and take all my documents to a preparer and walk away, I might consider it. Unfortunately, every time I had it done, I had to sit there line by line, provide all the cost basis for stock and everything else, not fun if I still have to spend my time and pay for theirs.
    I was and have been better off doing it myself.
    I will take the advice to do it myself and then take to a professional for a comparison and see if there’s any significant savings.
    Some places tout “peace of mind” or “worry free” support, but if you read the fine print if you provide wrong info, you are responsible. They will help you with the audit process, but are not there to provide legal advice. The IRS website also provides information on how to prepare for an audit including videos and FAQs.

  142. BD says 06 February 2013 at 01:48

    For those of you who are students, or low-income earners with a very simple income structure, you can take advantage of the free VITA (Volunteer Income Tax Assistance) program in your area. Yes, some people look down on VITA, but it’s a pretty safe choice if you have a simple tax return and it doesn’t cost you a cent. (Yes, I’m a VITA volunteer through my college this year. We’re pretty careful about getting the returns *correct* at our location.)

    It’s basically the same program as the IRS free file (linked to in the article), and is still under the IRS blanket. It’s just another option if you want to get help from someone face-to-face with filing your taxes.

  143. Ted Jenkin says 07 February 2013 at 12:55

    You decide whether you think tax strategy or investment strategy is going to be more important to your bottom line over the next decade. Make sure you aren’t penny wise and pound foolish. The right tax person can save you thousands of dollars if they know what they are doing.

  144. Susan - EA says 17 February 2013 at 13:21

    My professional tax program was purchased by Intuit, who also owns TurboTax. The cost over the last 5 years has gone from $12 per individual return to $50. This includes 1 state return and e-filing. When an individual with just W2s walks into my office I have to charge them $50 plus my time and overhead cost when they could do the return for free by using the internet. After completing the federal return they can go to the California site and file the state return there for free too. I TELL THEM HOW. Some still have me do the return for $75-90.

  145. Sybil ridgley says 16 April 2013 at 15:27

    Honestly, your tax specialist is only worth what you think he or she is worth to you. I spend countless hours with clients helping them to get their paperwork together or store it during the year for them. Paperwork that usually nets them a great deal of deductions that they otherwise would not think to take. Tax Reps in franchise offices come and go so frequently, it is difficult for them to get to know their client’s tax situations. I have history with my clients and they trust me to take care of them, but my time is also very valuable.

    • Sam Warren, CPA says 07 July 2018 at 07:16

      Well said. I’m a professional and I expect to be paid for my time. Your mechanic gets paid handsomely (look at the posted hourly rate the next time you take your car for service)!

  146. D. says 17 April 2013 at 08:17

    Personal Tax Service on Staten Island charged my wife and I $300. This is the last time getting taxes done there. We didn’t even get a decent refund, and we own a home. They suck.

    • Frank Hagan says 18 April 2013 at 08:16

      D, you might see if there is another independent tax pro in your area who will look at your return to see if there’s anything your preparer missed. I’ve done that here for clients, and about half the time there’s nothing else there, and another 25% there’s a minor difference that isn’t worth worrying about (i.e., filing the amended return would cost more than the extra refund).

    • Sam Warren, CPA says 07 July 2018 at 07:13

      $300 is probably a reasonable price bu can’t say for sure without more information. You realize yourbrefund is a function of your total tax minus your total prepayments? How does the size of your refund determine that they “suck”?

      I would put forward that that have done you well in that you didn’t owe $10k or get a refund for $10k – both of those outcomes indicate a problem you don’t want-I assure you!

  147. anne says 06 June 2014 at 10:15

    Hello! I always file my tax by my self because it gives me a security that IRS already received it. I also used fillable tax forms and here’s the link you might want to check it out. I am using this site for 2years now and it is really great!

  148. Jerry says 13 August 2014 at 08:06

    Is #1000-1500 a year too much for a retiree to pay a CPA each year for a return that involves a rental property in another state, five IRAs, along with two dozen mutual fund investments that generate dividend income and cap gains plus small losses occasionally on a few of those investments each year?

    • Sam Warren, CPA says 07 July 2018 at 07:09

      That is difficult to say. Take your last return with you and shop it around. You are talking about a multi state return which adds cost.

  149. Joey says 12 February 2015 at 07:39

    I did my taxes yesterday with H&R Block. 2015 has new guidelines and regulations. I know for a fact H&R Block’s minimum fee is $90. Since I had a coupon, I ended up paying $70. Not too bad.

  150. My Factoring Network says 05 November 2015 at 05:49

    Taxes for sure involves cost. Nice post to be more knowledgeable about taxes. Thanks for sharing.

  151. sarah g says 05 November 2015 at 19:46

    In Australia i just paid over $346 for my tax, which is personal income and a small business and a house… my new accountant said i was getting ripped off

    • Sam Warren CPASam Warren, CPA says 07 July 2018 at 07:06

      Is your new accountant a CPA? I doubt it. Consider the source!

  152. Katherine says 04 February 2016 at 10:39

    Historically, I used TurboTax but two years ago I switched to H&R Block software after the whole deluxe/premier bait and switch (I have rental property). I just did my taxes and am a bit shocked. I got married last year and now, my (our) tax liability ended up being significantly higher (several thousand dollars), even though our combined income was lower than last year. We’re not high earners. I have done our taxes for the last decade so I have comparisons of before and after marriage. Now, I’m seeking a CPA because there has to be a better outcome, other than divorce. So just to know I didn’t miss something, and if this indeed is my destiny, I will have peace of mind.

    • Sam Warren CPASam Warren, CPA says 07 July 2018 at 07:05

      Let your fingers do the walking. Talk to your friends. Ultimately you must like and trust whom you choose. Consider them your financial gynecologist. To get the best results you must show them EVERYTHING!

  153. Karthigan Srinivasan @ StretchADime says 04 February 2016 at 12:48

    I will be using Turbo Tax software to file my tax return. It has worked well for me for the past several years.

  154. Katie says 04 February 2016 at 16:33

    Unless you have a super complicated return, Turbo Tax is usually the way to go. Having said that, a qualified CPA or tax preparer can often save you a lot of money and worry, especially if you tend to rush through things when you get stressed out. In that case, professionals are well worth the $300-$400. Plus you get to deduct tax prep fees. One last tip…Look for coupons for Turbo Tax! I’m seeing a few that are 20% off. Happy Taxing!

    • Sam Warren CPASam Warren, CPA says 07 July 2018 at 07:02

      I am an intuit product user. Lacerte is their Cadillac product. I love turbo tax because unless you know EXACTLY what you are doing it is easy to find yourself receiving a nasty gram from the IRS. I have acquired more than one client this way!

  155. Kristi @ Femme Frugality says 05 February 2016 at 17:42

    We usually file our taxes ourselves, but since our taxes will be a bit more complicated this year, I’m looking into getting a CPA.

  156. George says 07 February 2016 at 10:51

    I am using TurboTax Home and Business since it came out and I never had any problems with it. I always takes me under an hour to complete the return. But so far all my tax situations were completely covered by the software.

  157. Keri Carpenter says 07 February 2016 at 11:14

    2015 taxes — I just did them with Turbo Tax and it was $94. I went without the additional audit support they offered for like $40 figuring if, in the unlikely case that something bad were to happen, I would likely get a real lawyer. My situation is very complicated, head of household, a young child, with a bunch (4) rental properties.

  158. cathy says 08 February 2016 at 10:06

    Married last year and am confused about taxes. Trying to decide between filing joint or married/separate.

    I’m salaried (State employee) and my husband is a self-employed musician. I/now we have a home so will be claiming mortgage interest, etc. but no complicated investment income/contributions or anything like that.

    He doesn’t have any funky itemization (home office, depreciation on equipment, etc.). His is just as straightforward – basically reporting his under 11K/year income and paying the approximate 15% self-employment tax rate.

    Playing around with online tax estimate sites, I figured if we file separately our/his liability is 1200 and my return would be under 200. If we file joint, our combined liability is 600 or so.

    Obviously our “home” saves $ filing jointly but I don’t know what form(s) I’d use.

    Any suggestions? Could we both use the 1040 itemized if filing jointly even if he’s self-employed?

    The idea of filing jointly is still weird to me – I mean, I still wash our clothes separately LOL.

    • Richard Barrington says 09 February 2016 at 05:40

      Hey Cathy – I can’t give you a definitive answer because each tax situation comes down to the specific details, but I do know that it is possible to file a 1040 jointly but have your husband attach a Schedule SE to report his individual self-employment income and expenses.

      Beyond that, it sounds like you are doing the right thing – using online tools to try it both ways, and see which gives you the most favorable results.

    • Sam Warren, CPA says 07 July 2018 at 06:51

      You’re asking for free tax advice? Is anything “free” worth ANYTHING? Do you work for free? I doubt it. You should consider hiring a CPA to assist you. You will pay less than a major service on your Lexus!

  159. Denise says 12 February 2016 at 14:34

    Did at home for 1,000 dollar returns, now my husband hired tax specialist who gets us 8-9 grand back every year. She includes things like mileage to and from Doctor, prescriptions, his union dues, work boots, gas to and from work for him. My question is, will this big return put a target on our head? Should I be worried about our preparer? Seems professional. Charges us 473 dollars for that big return though. I just want to know if this sounds fishy. I’ve begun keeping excellent records.
    Thank you for your consideration and help.

    • Richard Barrington says 15 February 2016 at 15:20


      I’m no expert on deductions, and it is impossible to make a definitive judgment without being up on all the details, but I will say that for one thing, deducting commuting expenses sounds dicey. I do want to point out a few things that might shed some light on your situation:
      1. The IRS web site,, is very helpful, so you might want to visit it just to check out the type of deductions you are taking. In particular, IRS Publication 529 deals with miscellaneous deductions in detail.
      2. If your accountant is independent rather than a member of a large organization, he may be cheaper but this also means he has less resources at his disposal, and is not representing a company with a well-known reputation on the line.
      3. If you are consistently getting large tax refunds, it may a sign that you are having too much deducted from your pay in the first place.

      Hope that helps.

      • jb says 18 February 2016 at 08:03


        Quite the opposite is true. Larger firms don’t have any more resources than a smaller firm. Its available to everyone. Also the smaller firms are able to give more attention to the client versus the Bigger firms where you might just be another number. By the sounds of it you’ve been paying too much in taxes for year. Are you afraid of the IRS? That’s a shame. Good luck.

        • Sam Warren CPASam Warren, CPA says 07 July 2018 at 06:57

          Agree with JB. I see Rich giving a lot of advice. Rich: what are your credentials?

    • Linda Vergon says 15 February 2016 at 16:00

      Hi Denise,

      We also made a post to our Facebook page with the link to the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. Here it is for your convenience in case it’s helpful to you:

      Best regards,

      Linda Vergon
      Editor of

    • Sam Warren, CPA says 07 July 2018 at 06:54

      Yes. You have a problem and a target in your head. Has your withholding changed? If not, you are raising a flag deducting things like “gas to and from work”. Does this guy have an active CPA license? I would be asking some tough questions and / or talking to the IRS CID people.

  160. Christy says 25 February 2016 at 12:46

    I spend about $50-75 dollars to buy Turbo Tax.

    I used to have a tax person do our taxes and every year we had to pay, pay, pay to the IRS and the tax person, who usually got around $5-600 for 1040 ez. All she did was punch numbers into a computer.

    So I finally asked our work accountant if there was something else I could do, she said she used Turbo Tax herself and just walk your way through it.

    The first year I was scared to death, just knew the IRS was going to hit us with a fine or something. But now I don’t worry about it, I figure the little tax audit thing at the end should be good enough and if I was audited for a turbo tax mistake, well I have the paper work to back up my numbers.

    So the last 7 years we have done Turbo Tax, I get the one where you get one state and 5 e-files as I do my kids taxes also.

    You have to watch which one you buy, we usually get deluxe but have used premier for when we sold land and our house and had our house up for rent.

    But since using Turbo Tax we have got a refund, not anything big, but enough to cover the cost of buying Turbo Tax and a nice dinner to celebrate yet again another year of getting that headache out of the way.

    Until we get something like a business, I probably won’t go back to a tax person. And we have retirement accounts, married, homes, 1099’s, expenses, renewable energy credits and income. We do it all on Turbo Tax.

    And tax people and accountants are not the same thing. I can prepare an e-file, but I can’t tell you what to do to save on taxes, represent you with the IRS and I do not have years of schooling. So paying for an accountant is like paying for a lawyer, they are trained and have years of knowledge that I as a turbo tax person would never have. You get your moneys worth from an accountant.

    • Sam Warren, CPA says 07 July 2018 at 06:45


  161. sandy says 27 February 2017 at 14:47

    My husband and I had multiple Ira’s that were transferred to another rollover, I have two that directly came to us and then we transferred into a rollover but the 1099R shows all as taxable, how can I put on the return that we rollovered this amt. to another IRA, hate to pay someone big bucks for this when I just have this one issue. Thanks

    • Sam Warren, CPA says 07 July 2018 at 06:43

      You’re seeking free tax advice? Do you work for free? I doubt it.

  162. DrMom says 18 April 2017 at 07:42

    All the deductions you listed are entirely legal and
    valid deductions. My husband worked out of a union hiring hall for
    years, and now is a company employee, but works at various locations.
    The only thing you need to ensure for commuting expenses is whether or
    not your husband is commuting to the same location every day all year.
    If he is, then no, you cannot deduct mileage for commuting. However, if
    he is working at various locations (as he sounds like he is a construction based union employee) then
    his mileage expenses are valid. If he normally works at a home base, but
    has what they call “temporary transfer” where he might have to go to
    another location sometimes, the temporary transfer mileage (the distance
    from his home base to the temporary location) is deductible – as long
    as the company is not reimbursing him or providing a vehicle. Medical
    expenses are valid deductions if your expenses are more than a certain
    percent of your income. His union dues, specialty safety work clothes,
    tools, etc. are all tax deductible.

  163. Daniel Martinez says 08 May 2017 at 21:22

    How much should I be paying someone to do my taxes if I own a traditional business?

    • Sam Warren, CPA says 07 July 2018 at 06:42

      Depends on cimplexity of your return, where you live, quality of your records, did you complete the organizer?, is your bookkeeper competent? Did I say “depends”?

  164. JimNtexas says 11 May 2017 at 09:18

    $473 is a fair price. I do not see how you could deduct ‘gas to and from work’. An auditor would probably deny that.

    Also, if you are getting ‘8-9 grand’ refunds, then you are overwithholding considerably.

    • Sam Warren, CPA says 07 July 2018 at 06:39

      LOL gas to and from work? Yes, an IRS auditor will not see the humor. Neither will your CPA. Why don’t you just jump in the ocean, slit a wrist and wait for the shark to show up?

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