A tax preparer fills in last year’s return from what already happened. A tax planner works before the year ends to change what happens, so you owe less over several years, not just this April. In NATP’s 2025 fee study, preparers charged an average of $236 for a basic Form 1040. Fee-only financial planners in the public graph charge a median $300 an hour or $2,000 for a one-time plan, which usually covers tax planning.
The two are often the same person or firm, but they’re different jobs. Most preparers spend most of their time preparing.
The two side by side
| Tax preparer | Tax planner | |
|---|---|---|
| When | After the year ends, mostly February to April | During the year, before decisions are final |
| Question it answers | What do I owe? | What should I do so I owe less over time? |
| What you get | A filed return | A plan: amounts, accounts and dates |
| Licence needed | A PTIN from the IRS, for anyone paid to prepare | None; it’s not a protected title |
| Who does it well | CPAs, enrolled agents, experienced preparers | CPAs, enrolled agents, financial planners with tax depth |
| Typical price | $236 average for a basic 1040 (2025) | $300 an hour or $2,000 for a plan |
What a preparer does
Anyone paid to prepare a federal return must have a preparer tax identification number (PTIN) from the IRS and put it on every return they file. The IRS counts more than 800,000 paid preparers, and the PTIN costs $18.75 for 2026. It’s a registration, not a test of skill.
Above that floor, the IRS recognises three levels:
- PTIN only. No exam or continuing education required. They can prepare your return but can’t represent you before the IRS on returns filed after 2015.
- Annual Filing Season Program. A voluntary IRS program: 18 hours of continuing education a year, including a six-hour refresher course with a test. Participants can represent only clients whose returns they prepared and signed, and only before some IRS staff.
- CPA, enrolled agent or attorney. Unlimited representation: any taxpayer, any matter, any IRS office. Our guide to enrolled agents vs CPAs compares the first two.
Preparation is what most of the industry is built around. In NATP’s 2025 study, tax form preparation made up 65% of respondents’ revenue; advisory services such as tax projections and withholding came to 4%, and financial planning 2%.
What a planner does
Tax planning means making choices while they can still change the result. A few common ones:
- Timing income. Taking a bonus, selling shares or exercising options in a lower-income year.
- Roth conversions. Moving money from a traditional IRA to a Roth in years when your bracket is low, such as early retirement before Social Security starts.
- Order of withdrawals. Deciding which accounts to draw from in retirement, year by year, so your bracket stays steady.
- Equity pay. Planning when to exercise and sell RSUs and options. Our guide to advisors for RSUs and stock options covers this in depth.
- Giving. Grouping several years of donations into one, or giving appreciated shares instead of cash.
None of these show up on the return until the year is over, and by then the choice is made. That’s why planning has to happen first.
“Tax planner” isn’t a credential, so look at what the person holds. A CPA or enrolled agent brings depth in tax law. A CFP brings the planning: how a tax move affects your retirement, cash and estate. Many households get the best result from a planner and a preparer who talk to each other. Our guide to CPAs vs financial advisors explains how that split works.
When each is the better choice
A preparer is enough when your income is mostly wages, you take the standard deduction, and nothing big changed. Good software or a careful preparer will get it right.
A planner earns their fee when you have decisions about timing:
- You run a business or have self-employment income
- You have RSUs, options or a concentrated stock position
- You’re within about five years of retiring, or recently retired
- You’re selling a business, property or a large holding
- You inherited an IRA or a large account
If two or three of those apply, the cost of a plan is usually small next to the taxes at stake. Our guides to whether financial advice is worth it and retirement planning go further.
What each costs
Preparation. In NATP’s 2025 study, preparers who charge a minimum fee plus complexity averaged $236 for a Form 1040 with Schedules 1 to 3, and the middle half charged $150 to $328. Schedules for itemized deductions, investments, a business or rentals cost extra. The few preparers who bill by the hour averaged $182 an hour.
Planning. Fee-only planners who publish prices charge a median $300 an hour (middle half $250 to $350), $2,000 for a one-time plan and $4,500 a year for ongoing planning. Our guides to hourly planner costs and one-time plan costs break those down.
Neither is deductible on a personal return. Tax preparation and investment advice fees were miscellaneous itemized deductions, suspended since 2018, and the tax law signed in July 2025 made the suspension permanent.
How to check either one
- Look the preparer up. The IRS Directory of Federal Tax Return Preparers with Credentials lists CPAs, enrolled agents, attorneys and Annual Filing Season Program participants who hold a current PTIN. A preparer with only a PTIN won’t appear.
- Make sure they sign. A paid preparer has to put their PTIN on your return. One who won’t sign it is a reason to walk away.
- Ask a planner for an example. Ask what tax moves they made for a client like you last year, and how they coordinate with the preparer who files the return.
- Check the planner’s record. If they give investment advice, search them on the SEC’s adviser search. Our guide to checking a financial advisor covers every database, and the glossary explains the CPA, enrolled agent and CFP.
To find planners who focus on tax, start with tax planning advisors or, if your pay is high or complicated, advisors for high earners.