Determining the Best Way to Prepare Your Taxes

Should you fill out paper forms, use tax software or hire a tax pro? Here's how to decide.

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There may be a million ways to skin a cat, but there are only three ways to prepare your tax return:

  1. Bust out the calculator and fill out the paper forms yourself.

  2. Choose a free or paid tax software that does the math and fills out the forms for you.

  3. Hire a tax professional to do the heavy lifting.

If you’re wondering about the best way to prepare your taxes, ask yourself four questions.

1. How complicated is my tax situation?

  • Not complicated: If income from your employer is pretty much the extent of your financial world, you take the standard deduction and haven’t had any big life changes, you might be able to fly solo on your Form 1040. You may not even need tax software.

  • Sort of complicated: Many people have to fill out supplemental forms and schedules on top of the Form 1040. In that case, tax software is usually the best way to prepare your taxes if the alternative is doing things by hand. It can help handle the workload.

  • Complicated: Those that involve businesses, extensive itemizing or big life changes such as a divorce, for example — may require human guidance. Some high-end versions of tax software offer good, human tax-pro help on demand, but the best way to prepare your taxes may be to hire an in-person tax pro instead.

  • If you're worried about a tax audit, understand what kind of audit protection your software gives you and what kind of tax preparer you're hiring (some can't represent you before the IRS in an audit).

2. How much time do I have?

In general, block out a solid day or two on your calendar. On average, taxpayers spend 11 hours filling out their 1040s (tack on more time for the state filing), according to the IRS. Taxpayers that don't have businesses to account for average about seven hours, the IRS says. If you had a side gig or ran a business, you'll need more time — 19 hours on average, according to the IRS.

3. How much do I want to spend?

  • By hand: Preparing a paper return by hand is basically free (except for postage and, of course, your time).

  • Basic software: Expect to spend $20 to $50, plus extra for state return preparation and e-filing (if you're using a desktop version of software).

  • Advanced software: If you’re itemizing, file in more than one state or have a more-than-basic tax life, you’ll probably need to upgrade to a more sophisticated version. That can run $50 to $100 or more, and prices tend to rise starting about 30 days before the tax filing deadline nears.

  • Free options: Many software providers offer free online tax preparation options, but they usually work only with simpler tax situations.

  • Another free option: The IRS's Free File program will match you with free, name-brand software if you have adjusted gross income below $73,000.

  • Human preparers: Hiring a tax professional runs $294 for an itemized Form 1040 with Schedule A and a state tax return on average, according to the National Society of Accountants. If you’re not itemizing, getting a pro to do your taxes still runs $188 on average.

4. How involved do I want to be?

  • Control freaks, tax code nerds and people with simple tax returns are often the only people who like the thought of doing the calculations and filling out forms by hand.

  • For those who don’t need to see exactly how the sausage is made but definitely want to be in the factory, software is usually the best way to prepare your taxes.

  • For just-make-it-go-away types who’d rather get a root canal without anesthesia than prepare a tax return, hiring a tax pro is huge.

  • Remember one thing, however: In the eyes of the IRS, the accuracy of your tax return is ultimately your responsibility. You can outsource the work, but you can’t outsource the liability — no matter which method you choose.

Best ways to prepare taxes: 4 key factors

By hand


Hire a human

Complexity of your tax situation




Time required

1-7 days+

1-2 days

Very little



$0-$50 (basic) $50-$100+ (advanced)

About $175-$300+

Personal effort




Learn more

  • Federal: $24.95 to $64.95. Free version available for simple returns only.

  • State: $29.95 to $44.95.

  • All filers get access to Xpert Assist for free until April 7.

Promotion: NerdWallet users get 25% off federal and state filing costs.

  • Federal: $39 to $119. Free version available for simple returns only.

  • State: $49 per state.

  • TurboTax Live packages offer review with a tax expert.

Promotion: NerdWallet users can save up to $15 on TurboTax.

  • Federal: $29.99 to $84.99. Free version available for simple returns only.

  • State: $36.99 per state.

  • Online Assist add-on gets you on-demand tax help.

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