How Much Help Do You Really Need With Your Taxes?

Taxes may be one of the two certainties in life, but that doesn’t mean you need to be filled with so much worry that you need to call up a pricey accountant to take care of them for you.

To help you better embrace the idea of filing taxes on your own, here's a cheat sheet to help you figure out how much help you really need to get the job done based on your tax situation. 

File for Free

If you're an individual taxpayer with a W-2 form from your employer, you’ll likely need to file a 1040 form and the filing process can be pretty simple and straightforward. While there are many tax prep software and applications on the market that can charge a fair amount to file, it's very possible to do your taxes for free. Here are some options below.

IRS Free File

The IRS’s Free File program is available to those who make a certain amount in a year. For tax year 2022, those who earned $73,000 or less in adjusted gross income (AGI) are eligible to use the service.

For those individuals who make more, there are free, fillable forms—and instructional how-to videos from IRSvideos.gov. Some state tax departments also offer free online filing tools. 

Cash App Taxes

Cash App Taxes is a free filing app that claims it is "100% free from start to finish," and includes the following assurances:

• Super simple—most people can file in minutes
• Max refunds, guaranteed
• Accurate calculations, every time
• Free audit defense

H&R Block

H&R Block offers a free online tool that covers simple returns for W-2 employees, child tax credit, unemployment income, and student loan interest.

TurboTax

TurboTax Free Edition is aimed at those filing federal 1040 forms and state returns. It is ideal for those with W-2 forms filing simple returns.

In-Person Option

If you’d prefer in-person filing help, try the AARP Foundation Tax-Aide, which offers free tax prep help to anyone in over 5,000 locations, regardless of AARP membership status. However, AARP does focus on taxpayers who are older than 50 and have moderate income or below.

After giving one of the volunteers your tax information, “your return is prepared right then and there, and it is electronically filed on your behalf,” said Julian Block, a tax attorney in Larchmont, NY. 

Middle-of-the-Road: File for Under $100

Let's say your tax situation isn't as simple as having a W-2, like needing to itemize your deductions, or being self-employed or part of the gig economy (like a consultant, Uber driver, or freelance writer). 

In this case, you’ll likely need to file a 1040 form and potentially a Schedule C form, which means you may be the ideal candidate for a paid-for piece of tax software. You should be able to get the whole thing done for under $100. Here are some options below:

• TaxAct offers a “Deluxe” option for homeowners, child care expenses, and student loan payments ($24.95), a Premier product for those with investments or rental property ($34.95), as well as a “Self Employed” service for independent contractors or self-employed filers ($64.95). The company charges an additional $44.95 for filing your state return regardless of service. 
• H&R Block offers “Deluxe” online filing for HSA contributors, those with child care and dependent expenses, and itemizers ($35), a “Premium” service for investors, property owners, and those selling cryptocurrency ($55), and a "Self-Employed" option for $85. State returns are an additional $37 per return regardless of service.
• TurboTax offers a “Deluxe” version for itemizers ($39), a “Premier” version for those with investments and rental property ($69), and a "Self-Employed" option for $89. The company charges an additional $39 for each state return.

Once you’ve figured it out, you can pick the platform that offers you the lowest price to file. If you’ve prepared your return but still have questions, or you aren’t sure you’ve done everything correctly, you have the option to take your prepared return to a tax professional and ask them to review it.

It’s Complicated: Prepare to Pay (But Not Necessarily That Much)

Let's say your tax situation is a bit more complicated. For example, maybe you're a small business owner or a partner/owner in a large business, or you had a qualifying event this year (like a marriage, divorce, or home sale). Maybe you have a lot of income from investments or you are a landlord.

In this case, you’ll likely be filing a 1040 form, plus some other forms—including, perhaps, a Schedule E form (if you rent out property or you’re a company shareholder or partner). You can still keep the price very low if you’re comfortable with online filing—perhaps with some live on-demand help—or you can hire a specific person for filing.

Your Options

• TurboTax offers TurboTax Live Deluxe, a service for one-way video chatting with a tax prep expert or registered agent. (It costs $89 and includes unlimited tax advice and an expert final review.)
• A tax prep service like H&R Block can be a viable option when you’d like to plan for next year and look at how new tax legislation could come into play (for example, are you looking for the highest possible take-home pay, or would you rather have a large refund?). "They specialize in looking at how your tax situation changed this year and how that might affect you next year," said Lynn Ebel, a tax attorney with the Tax Institute at H&R Block. The company offers free options for federal returns, and outside of that, the price varies based on the forms required.
• You might want to go with a CPA or enrolled agent if you’re building your own business, as these individuals have experience preparing both individual income taxes and advising businesses as they develop. They’re also a good option if you have a complicated portfolio of investments. But it won’t come cheap. Complex individual returns start can range from $1,000 to $1,500 and sometimes can go even higher. That might sound steep, but if your income is high enough and your taxes complicated enough, it may be worth it.

Frequently Asked Questions (FAQs)