What Is the Cost of Filing Taxes in the US in 2026? (Complete Guide)
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Tax seasons are a headache for every US business. Whenever the year starts, the pressure of closing your taxes fast with compliance is a feat that is hard to achieve. For big corporations, the cost of filing taxes is much higher compared to small businesses. But what decides that?
Multiple factors, like the complexity of your return, your business entity, the number of states you operate in, how clean your books and records are, and whether you file special forms (Schedule C, Form 1120-S, Form 1040, Form 1065, etc.).
If this isn’t enough, the credentials of your tax preparer also matter. A CPA may charge $200 to $500 per form; you might have to pay $250 to $750 to enrolled agents, or $200 to $600 to hire a general preparer.
This cost is way more than you have budgeted for. So, is the cost of filing taxes in the US $500+ on average? Actually, there is more to it than meets the eye. Let’s find out!
How Much Does It Cost to File Taxes in 2026?
Let’s get straight to the point: tax filing costs in the US in 2026 range from $0 to $3,000+, depending on who you are, what you’re filing, and who’s doing it for you.
However, on average, individuals pay between $220 and $600, small businesses budget $500 and $1,500, and large or complex businesses can exceed this tax budget up to $3,000.
If you’re a W-2 employee with a straightforward return, you might pay nothing using IRS Free File. If you’re running an S-Corp with multi-state operations and a pile of deductions to sort through, expect to pay well over $1,500, sometimes much more.
Here’s what the range actually looks like in practice:
- $0: IRS Free File (available if your AGI is $84,000 or below for tax year 2025) and partnering with someone in your familiarity circle.
- $150–$300: Basic personal return filed by a tax professional or affordable online service
- $300–$600: Self-employed, freelancers, or returns with itemized deductions
- $600–$1,500: Small business returns (LLC, S-Corp, Partnership)
- $1,500–$3,000+: Complex business filings, multi-state returns, or high-revenue corporations.
Personal Tax Filing Costs in 2026
For most Americans, personal tax filing comes down to one form, the Form 1040. But “personal” doesn’t mean simple. Depending on your income sources, deductions, and life situation, what you pay to file can vary quite a bit.
According to the National Society of Accountants, the average fee for a professionally prepared Form 1040 with a state return and no itemized deductions is $220. Add itemized deductions, and that average climbs to $323.
Those are the baselines. Here’s how costs shift based on your specific situation.
Simple Return (W-2 Income Only)
One employer, one W-2, no major changes. Typical professional fees range from $150–$300. Many filers qualify for free or low-cost software via IRS Free File (AGI ≤ $84,000). A CPA is usually unnecessary.
Self-Employed and Freelancers
Schedule C adds complexity and averages $192 on top of the base fee. Expect higher costs due to self-employment tax, quarterly estimates, and deductions requiring judgment. Typical range: $300–$500+.
Multiple Income Sources
Rental income (Schedule E), investments (Forms 8949/Schedule D), or side businesses increase prep time. Budget $400–$700, depending on volume and records.
Itemized Deductions
Most filers take the standard deduction, but itemizing (mortgage interest, SALT, charity, medical) raises prep costs. Average itemized return is approximately $323; complex cases can exceed $500.
Business Tax Filing Costs in 2026
Business tax filing costs more than personal returns, and for good reason. More entity types, more IRS forms, more schedules, and more compliance requirements all add up. Here’s what each business type typically pays in 2026.
Sole Proprietor
The simplest business structure to file. Sole proprietors report business income and expenses on Schedule C, attached to their personal Form 1040. No separate business return is required.
Typical cost: $300–$500
Costs go up if you have significant deductions, home office claims, or vehicle mileage to document.
LLC (Single-Member and Multi-Member)
A single-member LLC is treated as a disregarded entity by the IRS, meaning it files like a sole proprietor using Schedule C. A multi-member LLC, however, is taxed as a partnership and requires a separate Form 1065.
Typical cost: $500–$800 (single-member) | $750–$1,200 (multi-member)
Partnership
Partnerships file Form 1065 and must also issue a Schedule K-1 to each partner, reporting their share of income, deductions, and credits. That additional layer of reporting is why partnership returns sit at a higher price point.
Typical cost: $750–$1,500
S-Corporation
S-Corps file Form 1120-S, a dedicated corporate return separate from the owners’ personal returns. According to NSA data, the average preparation fee for Form 1120-S is $903. Add in owner W-2 reconciliation and K-1 distributions, and complexity grows fast.
Typical cost: $900–$1,500
C-Corporation
The most complex and expensive business return. C-Corps file Form 1120 and are subject to corporate-level taxation, making reconciliation, depreciation schedules, and financial statement alignment critical. The NSA reports an average prep fee of $913 for Form 1120, but larger corporations with multi-state operations or significant assets routinely pay well beyond that.
Typical cost: $1,000–$3,000+
Regardless of entity type, however, prices are going up. Recent industry data has shown a projected 87% of accounting firms plan to raise business filing fees in 2026, with most increases between 5% and 10%.
If you worked with a professional last year, build that increase into your budget now.
Average Cost of Tax Filing by Form (Full Table)
Forms are the expenses that most US businesses have to watch out for when filing taxes. This is because they are hard to fill out and time-consuming. Here is a clear explanation of the cost of filing each tax form in the US.
| IRS Form | What It’s Used For | Avg. Cost per Form (2026 Estimate) | Avg. Hourly Rate |
|---|---|---|---|
| Form 1040 (standard deduction) | Individual federal income tax return, no itemized deductions | $270–$290 | $150–$170 |
| Form 1040 (itemized, with Schedule A) | Individual return with itemized deductions, mortgage interest, charitable gifts, medical expenses | $395–$420 | $160–$185 |
| Schedule A | Itemized deductions attached to Form 1040 | $100–$130 (add-on) | $155–$175 |
| Schedule B | Interest and dividend income reporting | $40–$60 (add-on) | $140–$160 |
| Schedule C | Profit or loss from self-employment or sole proprietorship | $230–$250 | $155–$175 |
| Schedule D | Capital gains and losses from sale of stocks, property, or assets | $140–$160 | $155–$175 |
| Schedule E | Rental income, royalties, S-Corp and partnership income (pass-through) | $175–$195 | $155–$180 |
| Schedule EIC | Earned Income Credit (EIC) eligibility documentation | $75–$90 | $155–$175 |
| Schedule SE | Self-employment tax calculation (15.3% on net earnings per IRS) | $40–$60 (add-on) | $140–$155 |
| Form 940 | Federal Unemployment Tax (FUTA), employer annual filing | $90–$100 | $125–$145 |
| Form 941 | Employer quarterly payroll tax return | $80–$100 (per quarter) | $130–$150 |
| Form 1065 | Partnership return, income, deductions, and K-1 issuance | $875–$950 | $195–$220 |
| Form 1120-S | S-Corporation return, pass-through income and K-1 distribution | $1,050–$1,150 | $205–$230 |
| Form 1120 | C-Corporation return, corporate-level income tax | $1,075–$1,175 | $205–$235 |
| Form 709 | Gift tax return, gifts exceeding the annual exclusion ($18,000 in 2024 per IRS) | $490–$550 | $200–$225 |
| Form 706 | Estate tax return, estates exceeding the federal exemption threshold | $1,500–$1,650 | $215–$240 |
| Form 990 | Annual return for tax-exempt / nonprofit organizations | $850–$950 | $195–$215 |
| Form 1041 | Fiduciary return, income for estates and trusts | $680–$750 | $195–$215 |
| Form 2555 | Foreign earned income exclusion for US citizens living abroad | $300–$400 (add-on) | $200–$230 |
| Form 5500 | Employee benefit plan annual return (401k, pension) | $500–$800 | $200–$230 |
State-by-State Tax Filing Cost Differences
Where you live matters as much as what you file. According to the Tax Foundation, individual taxpayers spend an average of 8 to 13 hours and $160 to $290 filing their federal returns, but when state filing is required, the costs of compliance grow even higher. For owners of pass-through businesses, the average jumps to 21 hours and $610 at the federal level alone, before state obligations are added.
Here’s how the picture breaks down across all 50 states.
States With No Income Tax
As of 2026, nine US states impose no personal income tax, meaning residents have no state return to file, saving both time and money on tax preparation.
| State | No Income Tax Since | Key Consideration | Estimated Filing Savings vs. Avg. State |
|---|---|---|---|
| Alaska | Always | No sales tax either, lowest overall tax burden | $50–$150 saved |
| Florida | Always | 5.5% corporate income tax still applies to businesses | $50–$150 saved |
| Nevada | Always | Sales tax up to 8.375% in some localities | $50–$150 saved |
| New Hampshire | 2026 (partially) | Interest & dividends tax fully repealed Jan 1, 2025 | $50–$150 saved |
| South Dakota | Always | No corporate income tax either | $50–$150 saved |
| Tennessee | Always | One of the highest sales tax rates nationally (~9.55%) | $50–$150 saved |
| Texas | Always | High property taxes; franchise tax applies to businesses | $50–$150 saved |
| Washington | Always | 7% capital gains tax on gains exceeding $270,000 | $50–$150 saved |
| Wyoming | Always | No corporate income tax; business-friendly filing | $50–$150 saved |
Note: “Filing savings” reflects the elimination of a state return preparation fee, typically $50–$150 per state per the NSA fee survey baseline.
High-Cost vs. Low-Cost States for Tax Preparation
Regional cost estimates based on NSA Income & Fees Survey data (inflation-adjusted to 2026), Bluegrass Professional Associates 2025 state cost analysis, and CPA Trendlines regional reporting.
| State / Region | Relative Cost vs. National Average | Estimated Cost: Form 1040 (Standard) | Estimated Cost: Form 1040 (Itemized) | Notes |
|---|---|---|---|---|
| California | +42% above avg. | $385–$420 | $545–$600 | Highest prep costs in the nation; non-conformity with federal tax code adds complexity |
| New York | +30–35% above avg. | $350–$390 | $495–$550 | NYC surcharge common; city-level taxes add filing layers |
| Massachusetts | +25–30% above avg. | $340–$370 | $480–$530 | High CPA density but also high demand = premium rates |
| Connecticut | +25–30% above avg. | $340–$370 | $475–$520 | Tax benefit recapture rules add complexity |
| New Jersey | +20–25% above avg. | $325–$355 | $460–$510 | Highest property taxes in the US add Schedule A complexity |
| Illinois | +15–20% above avg. | $310–$340 | $440–$490 | County-level taxes add layers for some filers |
| Washington | +15–20% above avg. | $310–$340 | $440–$490 | No income tax but B&O tax complexity for businesses |
| Oregon | +10–15% above avg. | $300–$320 | $425–$465 | Low nonresident filing threshold ($2,910 single in 2026) |
| Colorado | Near avg. | $270–$300 | $380–$420 | Flat 4.4% state tax; simpler return structure |
| Georgia | Near avg. | $265–$295 | $375–$410 | Flat tax transition underway; relatively straightforward |
| Arizona | Near avg. | $265–$290 | $370–$405 | Flat 2.5% tax rate from 2023 simplifies filings |
| Minnesota | Near avg. | $270–$300 | $380–$415 | Nonresident threshold rose to $15,300 (single) in 2026 |
| Ohio | Near avg. | $265–$290 | $370–$405 | Complex local/school district taxes can add fees |
| Pennsylvania | Near avg. | $260–$290 | $370–$400 | Municipal taxes in Philadelphia area add cost |
| Michigan | Near avg. | $260–$285 | $365–$400 | Flat state tax; relatively simple structure |
| Texas | -10–15% below avg. | $235–$260 | $335–$365 | No income tax; only federal return needed for individuals |
| Florida | -10–15% below avg. | $235–$260 | $335–$365 | No income tax; lower overall prep demand = lower rates |
| Tennessee | -10–15% below avg. | $230–$255 | $330–$360 | No income tax since 2023 full repeal |
| Iowa | -15–20% below avg. | $220–$250 | $315–$350 | Flat 3.8% tax (2025); accelerated tax cuts simplified filing |
| Arkansas | -15–20% below avg. | $215–$245 | $310–$345 | Rate reductions in recent years; lower complexity |
| Kentucky | -15–20% below avg. | $215–$245 | $310–$345 | Flat tax; lower cost-of-living drives lower preparer fees |
| Mississippi | -20–25% below avg. | $205–$235 | $295–$330 | Lower cost-of-living; fewer complex return scenarios |
| West Virginia | -20–25% below avg. | $200–$230 | $290–$325 | Rural market; lower demand and lower preparer overhead |
| Wyoming | -32% below avg. | $185–$210 | $265–$295 | No income tax + lowest overall cost of living among states |
According to this data, the national average comes out to be $270–$290 for Form 1040 (standard) and $380–$420 (itemized).
Multi-State Filing
For taxpayers who work in more than one state and are required to file nonresident income tax returns, the complexity can be enough to frustrate even professional tax preparers.
| Filing Scenario | Additional Cost Per State | Total Estimated Add-On |
|---|---|---|
| Work in 1 additional state (nonresident return) | $50–$150 | $50–$150 |
| Work in 2 additional states | $50–$150 each | $100–$300 |
| Business operating in 3+ states | $100–$250 each | $300–$750+ |
| Reciprocity agreement states (e.g., PA/NJ, MD/VA) | $0–$50 | Minimal, credits offset double filing |
| States with no reciprocity + high thresholds | $150–$300 each | $300–$900+ |
What’s the Difference Between a CPA, Enrolled Agent, and Tax Preparer? And Does It Affect Price?
Not all tax professionals are equal, and they all bring all kinds of experience to the table. Yes, credentials directly affect what you pay; the reason why hiring the right person is key.
| Credential | Licensed By | What They Can Do | Avg. Hourly Rate | Avg. Cost (Simple Return) | Avg. Cost (Complex Return) |
|---|---|---|---|---|---|
| CPA | State Board of Accountancy | Full accounting, tax prep, audit representation, financial planning | $150–$400/hr | $300–$600 | $1,500–$3,000+ |
| Enrolled Agent (EA) | IRS (federally licensed) | Tax prep, IRS audit representation, tax planning | $100–$250/hr | $200–$400 | $750–$1,500 |
| Tax Attorney | State Bar Association | Complex tax law, disputes, litigation, estate planning | $200–$500/hr | $500–$1,000 | $2,000–$5,000+ |
| Non-credentialed Preparer | No federal requirement | Basic tax prep only — no audit representation | $50–$150/hr | $150–$300 | $300–$600 |
| Invedus Tax Preparer (VA) | Outsourced, min. 3 years experience with national or federal credentials | Individual returns (1040, 1041), business returns (1065, 1120-S, 1120), nonprofit (990), estate & gift (706) | From $7.99/hr | From $999/month (full-time) | From $999/month (full-time) |
Per IRS guidelines, anyone who prepares federal tax returns for compensation must have a valid Preparer Tax Identification Number (PTIN), but beyond that, requirements vary by state.
Who do you actually need?
- Simple W-2 return → Non-credentialed preparer or EA
- Self-employed or small business → EA or CPA
- IRS audit or tax dispute → EA or Tax Attorney
- Estate planning or corporate structuring → CPA or Tax Attorney
Some red flags you should avoid when hiring:
- Charges fees based on a percentage of your refund
- Refuses to sign your return or provide their PTIN
- Promises a larger refund than competitors without seeing your documents
- Asks you to sign a blank or incomplete return
Cost Comparison Between DIY Tax Software vs. Hiring a Tax Professional
The choice comes down to complexity and what your time is worth. However, a tax professional is a much better choice than relying on a cheaper resource and tax software for your US tax filing.
| Method | Cost Range | Best For |
|---|---|---|
| IRS Free File | $0 | AGI ≤ $84,000, simple W-2 returns |
| TurboTax | $89–$169 | Guided experience, moderate complexity |
| H&R Block | $35–$85 | Simple to mid-complexity personal returns |
| TaxAct | $25–$99.99 ($39.99 per state additional) | Decently resourceful filers |
| CPA / Enrolled Agent | $220–$3,000+ | Complex, business, or multi-state returns |
| Invedus Tax VA | From $999/month (full-time) or $7.99/hr (part-time) | Ongoing bookkeeping + tax prep support, year-round |
DIY software works well for straightforward W-2 filers. The moment you add self-employment income, investments, or rental property, a professional pays for itself.
The hidden costs of DIY:
- The IRS estimates that taxpayers spend an average of 8 hours preparing their own federal return.
- Errors can trigger IRS penalties of 5% per month on unpaid taxes, up to 25%.
- Missed deductions cost more than preparer fees ever would.
Plan Your Tax Budget Before Season Hits!
There is never a straight answer when it comes to calculating costs for filing taxes in the US. However, depending on whether you are an individual or a US business, it can cost you between $220 and $600 and between $500 and $1,500, respectively. Large or complex businesses can exceed this tax budget up to $3,000.
However, if you don’t have this kind of money, we at Invedus still support you. We believe the budget shouldn’t keep people from filing their taxes on time, and also shouldn’t have them rack up unnecessary fines.
Hence, you can hire a tax preparer from us and start your tax season with confidence. With our part-time model, individuals can access their tax preparation for under $200 per month, and businesses can file their taxes for $999 per month.
So, if this tax season you need to set a budget, contact Invedus.
Are there free options for preparing and submitting tax returns?
Yes. The IRS Free File program offers free federal filing for taxpayers with an AGI of $84,000 or below. Cash App Taxes offers free filing for the most common situations. IRS Volunteer Income Tax Assistance (VITA) also provides free in-person help for qualifying low-to-moderate income filers.
What is the average fee for a tax professional?
According to the National Society of Accountants, the average fee for a professionally prepared Form 1040 without itemized deductions is $220, rising to $323 with itemized deductions. Business returns average $750–$1,500, depending on entity type. CPA hourly rates typically run $150–$400 per hour.
What factors influence the total cost of tax preparation?
Key factors include return complexity, business entity type, number of states filed in, how organized your records are, and your preparer’s credentials. Additional forms like Schedule C or Form 1065 add cost. Disorganized records alone can add $150+ to your final bill.
Where can I find affordable tax filing services for simple returns?
For simple returns, with professional help, enrolled agents and outsourced tax VAs from Invedus are your most affordable option for tax filing in the US. They start from $7.99/hr and offer cost-effective alternatives to full-service CPA firms.
Best budget-friendly tax preparation services for independent contractors?
Independent contractors need Schedule C filed alongside their 1040, which adds complexity. Invedus tax preparers and tax filers handle this complexity well. Starting from $7.99 per hour, contractors can start getting tax preparation support as contractors with DIY tax software.
Last updated on: Feb 26, 2026