1040 Base

Personal Form 1040: What Preparation Costs and What’s Included

Quick Answer

A base Form 1040 at Illion Tax & accounting costs [Illion price — to be filled in]. That covers the federal return with a standard set of items: W-2 wages, interest and dividends, the standard deduction, and the calculation of tax owed or refunded.

Anything beyond that set is priced separately: self-employment income (Schedule C), rentals (Schedule E), asset sales (Schedule D), Schedule K-1 income from an S-corp or partnership, and foreign accounts or income. State returns are also billed separately, and how many you need depends on where you lived and worked during the year.

Clients who file a 1120, 1120-S or 1065 business return with us get the personal return at 25% off, provided the business return isn’t already discounted.

What the Service Includes

The base price covers an employee or a family with a straightforward income picture. Here’s what’s in it.

• Confirming filing status — single, married filing jointly or separately, head of household — which drives your deduction and rates.
• Entering wage income from one or several W-2s.
• Reporting interest and dividends from Forms 1099-INT and 1099-DIV.
• Applying the standard deduction and the basic credits you qualify for.
• Calculating final tax, your refund or balance due, and checking the year’s withholding.
• Reviewing whether withholding was sufficient, so April doesn’t bring a large balance plus an underpayment penalty.
• Checking eligibility for child and dependent care credits where they apply to your situation.
• E-filing with the IRS and setting up direct deposit for your refund.
• Checking whether a state return obligation arose and quoting it if one did.
• Storing the completed package in your client portal so the data is at hand next year.

Pricing

Here’s the structure: the base price, plus the items billed separately when they apply to you.

Item	Price	Frequency
Base Form 1040	[Illion price — to be filled in]	Annually
State return (per state)	[Illion price — to be filled in]	Annually
Schedule C (self-employment income)	See the Schedule C section	Annually
Additional forms and schedules	See the Additional items section	Annually
Filing extension (Form 4868)	[Illion price — to be filled in]	One-time
Rush preparation before the deadline	[Illion price — to be filled in]	One-time
Discount for business-return clients	25%	Annually

What Drives the Final Price

• Number of income sources. Two or three W-2s process quickly; a dozen 1099s from different platforms is a different job.
• Self-employment income. Any freelance activity moves the return into Schedule C territory.
• Investments and asset sales. Stocks, crypto and property sales require capital gain calculations and separate schedules.
• Equity compensation. Stock options, RSUs and ESPP sales usually arrive with both W-2 reporting and a brokerage form, and the two have to be matched so the same income isn’t taxed twice.
• Rental income. Each property is computed separately, with depreciation and expense allocation.
• Number of states. A move, or remote work for an out-of-state employer, often means two state returns.
• Family situation. Marriage, divorce, a new child or caring for a relative changes filing status and credits, and therefore the math.
• Foreign income and accounts. Foreign earned income exclusion, foreign tax credits and account reporting are separate work with their own deadlines.

Worked Example

Take a typical case: a married couple, both employed, filing jointly, with modest savings interest, living in one state all year.

Cost item	Calculation	Amount
Base Form 1040 (joint)	[Illion price — to be filled in]	[Illion price — to be filled in]
Wages from two W-2s	Included in the base price	$0
Interest on Form 1099-INT	Included in the base price	$0
Resident state return	[Illion price — to be filled in]	[Illion price — to be filled in]
Total	—	[Illion price — to be filled in]

If the same person picks up freelance work, the return moves into the Schedule C tier and is priced differently. Add stock or crypto sales and a capital gains schedule joins the package.

An S-corp owner almost always needs the personal return alongside the business one: profit arrives via Schedule K-1 and salary via W-2. That’s exactly the case the 25% discount is built for, when the business return is filed with us.

Moving mid-year is the most common source of unexpected cost. If you lived in two states, you’ll have two state returns, and that belongs in your budget from the start.

What Happens If You DIY or Skip It

A personal return feels like a formality right up until a second income source appears. After that the cost of a mistake climbs quickly — not because the math is hard, but because of deadlines and automated matching: the IRS receives copies of every W-2, 1099 and K-1 and compares them to your return automatically.

The failure-to-file penalty is 5% of unpaid tax for each month late, up to 25%. It applies regardless of intent and is calculated on the balance due, not on income.

The failure-to-pay penalty is smaller at 0.5% a month, but it also grows and carries interest. So when money is short, filing on time and arranging an installment plan beats not filing at all.

A Form 4868 extension moves the filing date, not the payment date. That’s the single most common misunderstanding: people file the extension, consider it handled, and discover accrued interest in October.

Refunds have their own trap. The right to a refund isn’t permanent: if a return isn’t filed within three years, the overpayment is forfeited. People with modest incomes sometimes lose money simply because they didn’t think filing was necessary.

Underpaid estimates are the under-appreciated risk. When income isn’t all on a W-2, withholding usually falls short, and a separate underpayment penalty applies on top of the tax. It’s small but recurring, and it feels unfair because the tax did get paid — just later.

DIY filing through a cheap online tool works while the picture stays simple. Trouble starts with a Schedule K-1, asset sales, two states or foreign accounts: the software will accept those returns, but the responsibility for an error stays with you.

How the Work Is Organized

1. We gather the documents: W-2s, 1099s, K-1s, deduction records and last year’s return.
2. We confirm filing status and the schedules involved, telling you upfront what falls outside the base price.
3. We prepare the computation and walk you through the result: refund or balance due, and what drove it.
4. We confirm the return, collect signatures and e-file with the IRS.
5. We file state returns where required and set up the details for refunds or payments.
6. Where it helps, we calculate next year’s estimated payments so April doesn’t bring a surprise.

Which Option Fits Which Business

Here are the benchmarks for whether your situation fits the base price.

Client situation	What we handle	Price guide
Employment income, one or two W-2s	Base 1040 plus a state return	Base price
Freelance or self-employed	1040 with Schedule C	See the Schedule C section
S-corp owner or partner	1040 with K-1 and W-2	Base price + schedules, 25% off
Investments, rentals, two states	1040 with additional schedules	See the Additional items section

Common Client Mistakes

1. Skipping the return because the employer withheld tax

Consequence: You forfeit the refund, and if tax is owed, penalties and interest grow.

How to avoid it: File even on modest income — more often than not it means a refund, not a bill.

2. Treating a Form 4868 extension as a payment deferral

Consequence: Interest and failure-to-pay penalties run from April 15.

How to avoid it: Pay your estimated balance when you file the extension.

3. Leaving 1099 income or cash side work off the return

Consequence: The IRS already has the 1099s; the mismatch triggers a notice and an assessment.

How to avoid it: Report every source, even one-off ones — the related expenses count too.

4. Ignoring a move between states

Consequence: The return goes to one state while the obligation arose in two.

How to avoid it: Tell us your move dates and work locations: they determine how income is split between states.