Why Tax Preparation Fees Have Gone Up — and Why That Doesn’t Necessarily Mean You’re Overpaying
Many taxpayers have noticed that the cost of professional tax preparation has risen sharply over the last several years. For clients who were once accustomed to paying a few hundred dollars for an annual return, today’s pricing can feel like a sudden and frustrating change. But the increase is not random, and it is not simply a matter of firms “charging more because they can.” In many cases, higher fees reflect a tax system that has become materially more complicated, a profession with a strained talent pipeline, and an economic environment in which the cost of providing professional services has risen across the board.1,2,3,4
The first major inflection point was the Tax Cuts and Jobs Act of 2017. The National Taxpayer Advocate described the TCJA as the most sweeping change to U.S. tax law since the Tax Reform Act of 1986. That is not a minor update. It means practitioners had to absorb a broad rewrite of the rules, forms, calculations, phaseouts, and planning strategies that apply to both individuals and businesses. A return that may have once involved straightforward data entry often began requiring substantially more analysis, interpretation, and review.1
For clients, one reason this matters is that tax complexity rarely announces itself clearly. A return may still look “simple” on the surface because the finished product is just a stack of forms. But what changed after 2017 was the amount of analysis required behind the scenes. A preparer now has to think through issues like the qualified business income deduction, the interaction between federal and state rules, revised deduction limitations, changing entity considerations, and a growing number of judgment calls that did not previously exist in the same way. A return that once looked routine may now require considerably more professional time and technical review.1
Then came the COVID era, which layered operational strain, temporary relief provisions, and repeated changes onto an already more complicated system. At the same time, the cost structure of professional service firms rose materially. According to the Bureau of Labor Statistics, the Consumer Price Index increased 2.9 percent from December 2023 to December 2024 and 2.7 percent from December 2024 to December 2025. Labor costs also continued to rise, with compensation costs for civilian workers increasing 3.4 percent over the 12 months ending December 2025. Tax preparation is a labor-intensive service business. When wages, software, compliance systems, insurance, continuing education, and overhead all cost more, the price of tax preparation rises too.2,3,4
Congress then added another major layer of change in 2025. The IRS states that the One, Big, Beautiful Bill Act, signed into law on July 4, 2025, significantly affects federal taxes, credits, and deductions. In other words, just as practitioners had finally adjusted to one wave of reform and post-pandemic disruption, Congress rewrote important parts of the operating landscape again. That means more study, more planning, more implementation work, and more time spent evaluating how new law applies to real-life fact patterns.5
This would be difficult enough if the profession had an abundant supply of experienced people. It does not. The accounting and tax pipeline has been under real strain. NASBA has described a CPA pipeline crisis and reported that the number of CPA candidates in 2021 had fallen by nearly one-third compared with 2016. More recently, the AICPA reported that graduates earning bachelor’s or master’s degrees in accounting fell to 55,152 in the 2023–24 academic year, down 6.6 percent from the prior year after further declines in the preceding years. At the same time, the Bureau of Labor Statistics projects about 124,200 openings for accountants and auditors each year, on average, from 2024 to 2034, many of them arising because workers leave the profession or retire.6,7,8
Demand, however, has not gone away. The Government Accountability Office reported in 2026 that more than half of all individual taxpayers used a paid preparer during fiscal year 2024. That is the classic setup for upward pressure on fees: strong demand, limited supply, and a shrinking pool of highly experienced professionals who can handle complex work well.9
That supply problem matters even more when clients want not merely a filed return, but competent advice. IRS preparer statistics currently show roughly 201,602 CPAs and 66,503 enrolled agents associated with PTIN-linked professional credentials for 2025. At the same time, the National Taxpayer Advocate has noted that in 2023, over 60 percent of returns prepared for hire were prepared by individuals without professional credentials. Many uncredentialed preparers may be honest and competent, but the point is that “tax preparer” is not a uniform product. The IRS itself notes that tax professionals have differing levels of skills, education, expertise, and representation rights.10,11,12
That is why the existence of someone still charging a bargain fee for a return should not automatically reassure you. Sometimes a low fee reflects efficiency and a genuinely simple fact pattern. But other times it reflects a volume business model in which the preparer has to move too quickly to provide meaningful review, thoughtful planning, or post-filing support. As the tax law has become more technical, the real question is no longer just, “Can someone get this filed?” It is, “Is someone spending enough time to get this right?”1,12
To be clear, taxpayers who value saving on preparation costs over working with a tax professional have long had alternatives. Products like TurboTax already exist for taxpayers who are comfortable preparing and filing their own returns, including free options for some simple returns. But the risk of relying on those products should not be understated in a tax environment that has become materially more complex. Many taxpayers believe their situation is simple when it is not. And with IRS Direct File no longer available for Filing Season 2026, much to the disappointment of many overburdened tax professionals who wanted taxpayers to have a free alternative, the divide between low-cost form completion and real professional judgment has only become more pronounced. 14,15,16
This is also where artificial intelligence and software tools are often misunderstood. Technology can absolutely make data gathering, document organization, and some simple return preparation more efficient. But technology does not eliminate legal complexity, factual nuance, substantiation requirements, or professional judgment. The Bureau of Labor Statistics itself expects technology and AI to make accountants more efficient while pushing their work further toward advisory and analytical duties, not eliminating the need for them. In practice, truly simple returns are less common than many people assume, and the more complicated the code becomes, the more valuable good judgment becomes.8
A good tax professional is not just selling a finished tax return. They are selling informed judgment, current technical knowledge, continuity, and accountability. A preparer who knows your history over a period of years is in a much better position to identify inconsistencies, catch missing information, preserve elections, and explain your return if it is later examined. The IRS expressly advises taxpayers to choose a preparer they can contact if the IRS has questions about how the return was prepared. That continuity has value, especially in a system that continues to grow more complex.16
So yes, tax preparation fees have gone up. But in many cases, they have gone up for rational reasons: the tax code changed dramatically in 2017, inflation pushed up the cost of professional services, Congress changed the rules again in 2025, and the supply of experienced tax professionals has been constrained while demand remains strong. That is not price gouging. It is the market response to a more difficult job.1,2,3,4,5,6,7,8,9
For taxpayers, the better question is not whether fees are higher than they were five or ten years ago. They are. The better question is whether the professional you hire is delivering enough value, rigor, and protection to justify the fee. In a tax environment this complex, paying more for competence can be far less expensive than paying less for mistakes.12,16
Endnotes
1. Nina E. Olson, Statement of the National Taxpayer Advocate before the U.S. House Committee on Oversight and Government Reform, Apr. 17, 2018, and Taxpayer Advocate Service, Fiscal Year 2019 Objectives Report to Congress, Volume One (2018).
2. U.S. Bureau of Labor Statistics, Consumer Price Index: 2024 in Review, Jan. 24, 2025.
3. U.S. Bureau of Labor Statistics, Consumer Price Index: 2025 in Review, Jan. 21, 2026.
4. U.S. Bureau of Labor Statistics, Compensation Costs Up 3.4 Percent from December 2024 to December 2025, The Economics Daily, Feb. 23, 2026; see also Employment Cost Index Summary — 2025 Q04 Results, Feb. 10, 2026.
5. Internal Revenue Service, One, Big, Beautiful Bill Provisions.
6. National Association of State Boards of Accountancy, State Board Report, Dec. 2022.
7. American Institute of CPAs, Accounting Firms Report Strong Hiring Outlook, AICPA Report Finds, Oct. 26, 2025.
8. U.S. Bureau of Labor Statistics, Accountants and Auditors, Occupational Outlook Handbook.
9. U.S. Government Accountability Office, Paid Tax Return Preparers: Opportunities Remain to Improve Oversight and Protect Taxpayers, GAO-26-108723, Feb. 24, 2026.
10. Internal Revenue Service, Return Preparer Office Federal Tax Return Preparer Statistics, last reviewed Mar. 26, 2026.
11. Erin M. Collins, The TAS Act Strikes a Reasonable Balance on Return Preparer Oversight, National Taxpayer Advocate Blog, Apr. 1, 2025.
12. Internal Revenue Service, Understanding Tax Return Preparer Credentials and Qualifications, Jan. 29, 2026.
13. Intuit TurboTax, TurboTax Online 2025–2026 | Tax Software & Pricing.
14. Intuit TurboTax, TurboTax Free Edition.
15. Internal Revenue Service, Use IRS Free File to conveniently file your return at no cost, IR-2026-05 (Jan. 9, 2026).
16. Internal Revenue Service, Topic No. 254, How to Choose a Tax Return Preparer, Feb. 12, 2026.