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Reviewed by our in-house tax team before publishing. Every figure is validated against:
Last reviewed: November 13, 2026
The IRS estimates that the average taxpayer filing a 2025 Form 1040 spends 12 hours and $290 out of pocket to prepare and file it, according to the burden table in the IRS instructions for Form 1040 for tax year 2025. Filers with a Schedule C, E or F average 21 hours and $610; everyone else averages 8 hours and $160. Across all federal individual and business income tax returns, the fiscal year 2026 estimates that OMB approved in January 2026 add up to 2.8 billion hours and $129.0 billion in out-of-pocket costs (our calculation). Tax practitioners e-filed 86.7 million individual returns in fiscal year 2025, 53.3% of all individual returns filed.
Key takeaways:
The average out-of-pocket cost of preparing and filing a 2025 federal individual income tax return is $290, according to the "Estimated Average Taxpayer Burden for Individuals by Activity" table in the 2025 Form 1040 instructions. Out-of-pocket costs are what filers spend to prepare and submit the return: preparation and filing fees, tax software, postage and copying. The figure averages every filer, including those who paid nothing, so it is not the price of hiring a preparer. The IRS does not publish an average paid-preparer fee.
| Type of filer (2025 Form 1040) | Share of returns | Average time | Average out-of-pocket cost | Average monetized burden* |
|---|---|---|---|---|
| All taxpayers | 100% | 12 hours | $290 | $540 |
| Nonbusiness filers | 71% | 8 hours | $160 | $310 |
| Business filers (Schedule C, E or F, or Form 2106) | 29% | 21 hours | $610 | $1,100 |
Source: IRS, 2025 Instructions for Form 1040 and 1040-SR, burden table (statutory requirements as of October 1, 2025). *Monetized burden, out-of-pocket cost plus time valued at an after-tax wage rate, is from Table 2 of the IRS supporting statement for OMB control number 1545-0074, fiscal year 2026. Dollars rounded to the nearest $10.
"Business" is an IRS definition: a Form 1040 with Schedule C (sole proprietorship), Schedule E (rentals, partnerships, S corporations), Schedule F (farming) or Form 2106. A business filer spends $610, 3.8 times a nonbusiness filer, and 2.6 times the hours (our calculation). For what a CPA charges per return, see how much a CPA costs in 2026.
The IRS warns that these are "national averages and don't necessarily reflect a 'typical' case." Medians are lower: filers with total income under $25,000 average $125 out of pocket, but the median filer in that band spends $83 (see the income tables below).
The average Form 1040 filer spends 12 hours on a 2025 return: 5 hours of recordkeeping, 2 hours of tax planning, 4 hours completing and submitting the form and 1 hour on everything else, per the IRS Form 1040 instructions for tax year 2025. Business filers average 21 hours, 10 of them on recordkeeping.
| Activity, average hours (2025 Form 1040) | All taxpayers | Nonbusiness filers | Business filers |
|---|---|---|---|
| Recordkeeping | 5 | 3 | 10 |
| Tax planning | 2 | 1 | 4 |
| Form completion and submission | 4 | 3 | 5 |
| All other | 1 | 1 | 2 |
| Total | 12 | 8 | 21 |
Source: IRS, 2025 Instructions for Form 1040 and 1040-SR. Detail may not add to total due to rounding.
Recordkeeping is the largest block of time for every group: 42% of the all-filer average and 48% of the business-filer average (our calculation). The IRS counts only records kept solely for tax purposes (Publication 5743), and the estimate stops at filing: notices, amended returns and audits are not included. By total income, the median 2025 filer spends between 6.8 and 17.9 hours (Table 4 of the IRS supporting statement for OMB control number 1545-0074). Our small business tax prep checklist lists the records a preparer asks for.
The average out-of-pocket cost per Form 1040 rose from $210 for tax year 2019 to $290 for tax year 2025, up 38% in nominal dollars, according to seven editions of the IRS Form 1040 instructions (our calculation). Business filers' average rose 49%, from $410 to $610. Nonbusiness filers' rose 23%, from $130 to $160.
| Tax year | All filers | Nonbusiness filers | Business filers | Business share of returns |
|---|---|---|---|---|
| 2019 | 11 hours, $210 | 7 hours, $130 | 20 hours, $410 | 30% |
| 2020 | 12 hours, $230 | 8 hours, $140 | 21 hours, $440 | 30% |
| 2021 | 13 hours, $240 | 9 hours, $160 | 22 hours, $470 | 28% |
| 2022 | 13 hours, $250 | 8 hours, $140 | 25 hours, $530 | 28% |
| 2023 | 13 hours, $270 | 9 hours, $150 | 24 hours, $560 | 28% |
| 2024 | 13 hours, $290 | 8 hours, $160 | 24 hours, $620 | 29% |
| 2025 | 12 hours, $290 | 8 hours, $160 | 21 hours, $610 | 29% |
Source: IRS Instructions for Form 1040 and 1040-SR, tax years 2019 to 2025, burden table. Dollars are nominal and rounded to the nearest $10.
Time moved less than money. The all-filer average stayed between 11 and 13 hours, and business filers peaked at 25 hours for 2022 before falling to 21 for 2025. Part of the 2025 drop is a model change, not a change in filers: the IRS says new survey data and model updates lowered its total monetized individual burden by 4.5%, "primarily driven by a 5.6% reduction in time burden." The One Big Beautiful Bill Act (Pub. L. 119-21) pushed the other way, adding 25.9 million hours and $761 million in out-of-pocket costs, partly through the new deductions for tips, overtime and car loan interest (supporting statement Tables 5 and 6).
Out-of-pocket cost rises with income, and much faster for the self-employed. Self-employed filers in the top fifth by total positive income average $1,201 out of pocket and 28.0 hours on a 2025 return, against $373 and 9.2 hours for wage and investment filers in the same quintile, according to Table 3 of the IRS fiscal year 2026 supporting statement for OMB control number 1545-0074. That is 3.2 times the cost (our calculation).
| Total positive income quintile | All filers | Wage and investment filers | Self-employed filers |
|---|---|---|---|
| Bottom 20% | 7.7 hours, $85 | 6.8 hours, $69 | 10.9 hours, $142 |
| 20% to 40% | 9.7 hours, $136 | 8.1 hours, $115 | 16.7 hours, $229 |
| 40% to 60% | 10.1 hours, $179 | 7.7 hours, $145 | 18.1 hours, $295 |
| 60% to 80% | 11.1 hours, $263 | 7.7 hours, $201 | 18.6 hours, $397 |
| Top 20% | 19.1 hours, $810 | 9.2 hours, $373 | 28.0 hours, $1,201 |
Source: IRS supporting statement, OMB control number 1545-0074, fiscal year 2026 (tax year 2025 returns), Table 3. Average out-of-pocket costs.
The same statement gives averages and medians by total income in $25,000 bands. Selected bands:
| Total income | Average time | Average out-of-pocket cost | Median time | Median out-of-pocket cost |
|---|---|---|---|---|
| Under $25,000 | 10.7 hours | $125 | 8.5 hours | $83 |
| $50,000 to $75,000 | 9.8 hours | $199 | 6.8 hours | $155 |
| $100,000 to $125,000 | 10.5 hours | $303 | 7.9 hours | $239 |
| $200,000 to $225,000 | 11.9 hours | $520 | 9.4 hours | $416 |
| $475,000 to $500,000 | 22.1 hours | $1,402 | 17.9 hours | $1,194 |
Source: IRS supporting statement, OMB control number 1545-0074, fiscal year 2026, Table 4.
Our self-employment statistics for 2026 cover how many Americans file a Schedule C.
A small S corporation or other pass-through corporation spends an average of 50 hours and $4,200 out of pocket on its federal income tax return, according to the burden tables in the 2025 instructions for Forms 1120-S, 1065 and 1120. Small partnerships average 50 hours and $3,300, and small C corporations 40 hours and $3,900. The IRS defines a large business as one with end-of-year assets above $10 million.
| Entity type (2025 returns) | Returns (millions) | Average time | Average out-of-pocket cost | Average monetized burden |
|---|---|---|---|---|
| All partnerships (Forms 1065, 1066) | 5.5 | 60 hours | $5,300 | $8,700 |
| Small partnerships | 5.1 | 50 hours | $3,300 | $5,200 |
| Large partnerships | 0.4 | 180 hours | $29,400 | $50,700 |
| All taxable corporations (Form 1120 series) | 2.3 | 90 hours | $8,600 | $15,700 |
| Small taxable corporations | 2.1 | 40 hours | $3,900 | $6,000 |
| Large taxable corporations | 0.2 | 610 hours | $69,400 | $141,500 |
| All pass-through corporations (Forms 1120-S, 1120-REIT, 1120-RIC) | 6.2 | 60 hours | $4,800 | $7,700 |
| Small pass-through corporations | 6.1 | 50 hours | $4,200 | $6,500 |
| Large pass-through corporations | 0.1 | 290 hours | $42,600 | $76,600 |
Source: IRS, 2025 Instructions for Forms 1065, 1120-S and 1120, Tables 1 to 3 (statutory requirements as of December 2025). Third-party burden hours are not included.
Size by income tells a similar story. The supporting statement for OMB control number 1545-0123 (Table 3) splits each entity type by total positive income, the sum of all positive income amounts on the return:
| Total positive income | Partnerships | Pass-through corporations | Taxable corporations |
|---|---|---|---|
| Under $100,000 | 40 hours, $1,700 | 50 hours, $1,700 | 30 hours, $1,400 |
| $100,000 to $1 million | 50 hours, $4,900 | 50 hours, $4,000 | 50 hours, $4,700 |
| $1 million to $10 million | 90 hours, $14,500 | 70 hours, $10,200 | 90 hours, $14,200 |
| $10 million to $100 million | 330 hours, $55,100 | 270 hours, $40,800 | 380 hours, $55,600 |
| Over $100 million | 1,550 hours, $239,000 | 1,220 hours, $175,700 | 3,240 hours, $295,700 |
Source: IRS supporting statement, OMB control number 1545-0123, fiscal year 2026, Table 3. Average out-of-pocket costs.
Between the fiscal year 2025 and 2026 estimates, the average out-of-pocket cost for all taxable corporations rose from $7,400 to $8,600 and for small pass-through corporations from $3,900 to $4,200 (89 FR 103931 and the 2025 instructions). S corporation owners also file a Form 1040, which counts as a business return because S corporation income goes on Schedule E. See our guides to Form 1120-S and Form 1065.
Federal income tax returns cost 2.8 billion hours and $129.0 billion out of pocket in fiscal year 2026, by our sum of the two OMB-approved estimates that Treasury published on December 15, 2025 (90 FR 58090 and 90 FR 58091). Counting the hours at the IRS's monetized rates as well, the total burden is $223.6 billion.
| Collection, FY2026 | Respondents | Hours | Monetized time | Out-of-pocket costs | Total monetized burden |
|---|---|---|---|---|---|
| Individual (OMB 1545-0074, Form 1040 series) | 170.1 million | 1.948 billion | $42.03 billion | $49.76 billion | $91.79 billion |
| Business (OMB 1545-0123, Forms 1065 and 1120 series) | 14.0 million | 857 million | $52.58 billion | $79.22 billion | $131.79 billion |
| Total (our calculation) | 184.1 million | 2.805 billion | $94.60 billion | $128.98 billion | $223.58 billion |
Sources: Federal Register 90 FR 58090 and 90 FR 58091 (December 15, 2025); OMB approved the inventories in January 2026 (ICR 202509-1545-010 and 202511-1545-005 on reginfo.gov). Total monetized burden = monetized time + out-of-pocket costs. Respondents are returns, so an S corporation and its owners count separately.
Businesses file 7.6% of these returns but account for 61.4% of the out-of-pocket dollars (our calculation). Monetized time works out to $21.57 per hour for individuals and $61.35 per hour for businesses (monetized time divided by hours, our calculation). Against fiscal year 2025, estimated hours fell 8.5% for individuals and 8.4% for businesses, while out-of-pocket costs rose 2.2% and 10.6%.
Preliminary fiscal year 2027 figures, published in August 2026, are 1.95 billion hours and $51.23 billion out of pocket for individuals (91 FR 54920) and 826.5 million hours and $78.21 billion for businesses (91 FR 51534). Final figures come with Treasury's next 30-day notice.
Tax practitioners e-filed 86,696,461 individual income tax returns in fiscal year 2025, 53.3% of the 162,754,810 individual returns filed, according to IRS Data Book FY2025 Tables 1-2 and 1-4 (share is our calculation). Taxpayers e-filed 65,771,253 returns themselves with online software, including 3,187,642 through Free File and 308,628 through Direct File. The remaining 10.3 million were paper returns, which the Data Book does not split by preparer.
| Fiscal year | Individual returns filed | E-filed by practitioners | Share of all returns | Self-prepared online | Paper |
|---|---|---|---|---|---|
| FY2019 | 154,094,555 | 79,938,827 | 51.9% | 57,303,192 | 16,852,536 |
| FY2020 | 157,195,302 | 83,519,433 | 53.1% | 64,637,873 | 9,037,996 |
| FY2021 | 167,915,264 | 83,947,470 | 50.0% | 67,188,098 | 16,779,696 |
| FY2022 | 160,571,367 | 85,885,109 | 53.5% | 64,720,053 | 9,966,205 |
| FY2023 | 163,146,934 | 84,042,484 | 51.5% | 63,912,683 | 15,191,767 |
| FY2024 | 161,052,672 | 85,391,233 | 53.0% | 64,876,149 | 10,785,290 |
| FY2025 | 162,754,810 | 86,696,461 | 53.3% | 65,771,253 | 10,287,096 |
Source: IRS Data Books FY2019 to FY2025, Table 2 or 1-2 (returns filed) and Table 4 or 1-4 (filed electronically). Shares and paper counts (all individual returns minus e-filed) are our calculations.
The practitioner share has held between 50.0% and 53.5% for seven years. The Data Book notes that "practitioner filed" covers returns sent through an authorized e-file provider "who was, in most cases, also the return preparer," so it is a close proxy for paid preparation, not an exact count. For the differences between preparer types, see CPA vs tax preparer vs bookkeeper.
The IRS weekly filing season statistics show the same split by calendar year. Through December 26, 2025, the IRS received 87,855,000 e-filed returns from tax professionals and 67,056,000 self-prepared ones, so professionals filed 56.7% of e-filed returns (our calculation). Through May 8, 2026, self-prepared e-filing was up 1.7% on the year and professional e-filing up 0.6%. Direct File will not return in this series: the IRS told OMB in December 2025 that "The Direct File pilot program has been terminated."
We downloaded every source file on November 10, 2026: Form 1040 instructions for tax years 2019 to 2025, the 2025 instructions for Forms 1065, 1120-S and 1120, the Federal Register notices and fiscal year 2026 IRS supporting statements for OMB control numbers 1545-0074 and 1545-0123, IRS Data Book returns-filed tables for FY2019 to FY2025, and the IRS weekly filing season statistics. Burden figures are IRS model estimates, rounded by the IRS. Percentage changes, ratios, combined totals, practitioner shares and per-hour rates are our calculations. Trade-association fee surveys are member surveys, not official data, and are not used here.
How to cite: Jupid, "Cost of Tax Preparation Statistics 2026: Hours and Dollars," November 2026, https://jupid.com/blog/tax-preparation-cost-statistics-2026 (data: IRS Form 1040 instructions, tax year 2025; OMB 1545-0074 and 1545-0123; IRS Data Book FY2025).
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This page is for general educational purposes and does not constitute tax, legal, or accounting advice. IRS burden figures are national model estimates for federal income tax returns, not quotes for any individual return. For a fee estimate on your own return, ask a qualified tax professional.
CEO & Co-Founder
Fintech CEO with 10+ years building accounting and financial technology products. Previously co-founded and scaled an AI-powered accounting platform to $30M revenue and 100K+ business users, achieving 30,000 customers per accountant through automation — recognized by CNBC as a top fintech company. Holds a Master's in Management Information Systems. At Jupid, he leads the development of AI-native bookkeeping, tax, and compliance tools designed for freelancers and small business owners.
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