Quick Answer
Tax preparation fees are generally not deductible for individual returns since 2018. However, business owners can deduct the business portion of tax prep costs, and fees for prior year amendments may qualify. The average taxpayer pays $273 for professional tax preparation but cannot deduct this cost.
Best Answer
Diana Flores, Tax Credits & Amendments Specialist
Best for employees with straightforward tax situations who pay for tax preparation services
The short answer: No deduction for most people
Since the Tax Cuts and Jobs Act took effect in 2018, tax preparation fees for individual tax returns are not deductible through 2025 (and likely beyond under the One Big Beautiful Bill Act). This means if you pay H&R Block, a local CPA, or TurboTax to prepare your personal return, you cannot deduct these costs.
What changed in 2018
Before 2018:
Since 2018:
Example: $60,000 earner paying $350 for tax prep
You earn $60,000 and pay $350 to have your taxes prepared. Under current law:
Tax deduction: $0
Tax savings: $0
Even if you pay $1,000+ for complex preparation involving multiple states, rental properties, or investment income, the cost remains non-deductible for your personal return.
What tax preparation costs include
Deductible (if rules allowed):
Never deductible:
Limited exceptions that still exist
Business tax preparation:
Prior year amendments:
Investment-related preparation:
State tax considerations
Some states still allow tax preparation deductions even though federal law doesn't:
Comparison: Tax prep costs vs. potential savings
What you should do
1. Don't expect a federal deduction for personal tax prep fees
2. Keep receipts anyway in case laws change or for state returns
3. Separate business vs. personal costs if you have business income
4. Consider the value of professional preparation beyond just tax savings
5. Check your state's rules as they may differ from federal
Use our refund estimator to see if professional tax preparation might find deductions that exceed the preparation cost.
Key takeaway: Tax preparation fees for individual returns are not federally deductible since 2018, costing the average taxpayer $273 annually with no tax benefit.
*Sources: [IRS Publication 17](https://www.irs.gov/pub/irs-pdf/p17.pdf), [Tax Cuts and Jobs Act](https://www.congress.gov/bill/115th-congress/house-bill/1)*
Key Takeaway: Tax preparation fees for individual returns have been non-deductible since 2018, with no federal tax benefit for the $273 average cost.
Tax preparation costs and deductibility by taxpayer type
| Taxpayer Type | Average Cost | Federal Deduction Available | Potential Tax Savings |
|---|---|---|---|
| Individual W-2 Employee | $200-400 | None | $0 |
| Complex Individual | $500-1,500 | None | $0 |
| Business Owner (mixed) | $800-2,500 | Business portion only | $200-900 |
| Business Entity Only | $1,200-3,000 | 100% deductible | $290-1,110 |
More Perspectives
Robert Kim, Tax Return Analyst
Best for self-employed individuals or business owners who file both business and personal tax information
Business portion is still deductible
If you have business income (Schedule C, partnership, or corporation), you can deduct the portion of tax preparation fees related to your business taxes. This is one of the few remaining ways to get tax benefits from preparation costs.
How to calculate the business portion
Method 1: Time allocation
If your preparer spends 40% of their time on business tax issues, 40% of the fee is deductible.
Method 2: Complexity allocation
If business forms represent 60% of your return's complexity, 60% of the fee may be deductible.
Method 3: Separate billing
Some preparers bill business and personal portions separately, making the allocation clear.
Example: $100,000 business owner paying $1,200 for tax prep
You have a consulting business generating $100,000 in revenue and also have W-2 income and personal investments. Your CPA charges $1,200 to prepare everything.
Allocation:
Documentation requirements
What qualifies as business tax preparation
Clearly deductible:
Questionable/personal:
Key takeaway: Business owners can still deduct the business portion of tax preparation fees, potentially saving 24-37% of those costs through reduced taxes.
Key Takeaway: Business owners can deduct the business portion of tax prep fees, potentially saving 24-37% of those costs.
Diana Flores, Tax Credits & Amendments Specialist
Best for families with multiple income sources, investments, and complex personal tax situations
No deduction despite high costs
Families with complex tax situations often pay $800-2,000+ for professional tax preparation, but these costs remain non-deductible for personal tax purposes under current law.
Common family tax complexities
High-cost scenarios with no deduction:
Example: Family paying $1,500 for complex preparation
Your family has:
Federal deduction: $0
Lost tax savings: ~$330-555 (22-37% of $1,500)
Strategies to maximize value
Since you can't deduct the cost:
1. Ensure your preparer finds all available deductions to justify the expense
2. Keep detailed records to reduce preparer time and costs
3. Bundle multi-year planning to get more value from consultations
4. Compare preparers based on expertise, not just cost
When professional help pays for itself
High-value scenarios:
Alternative cost-saving approaches
Key takeaway: Complex family tax situations generate high preparation costs ($800-2,000+) with no federal deduction, making it crucial to ensure the preparer finds deductions that exceed their fee.
Key Takeaway: Families pay $800-2,000+ for complex tax prep with no deduction, making it essential to ensure the value exceeds the cost.
Sources
- IRS Publication 17 — Your Federal Income Tax (Individual Returns)
- IRS Publication 535 — Business Expenses
Related Questions
Reviewed by Diana Flores, Tax Credits & Amendments Specialist on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.