Firm Services: Average Fees for Accounting & Tax

I get these questions all the time; whether in passing, over the phone, or in a consultation.  How much does your firm charge to prepare a 1040? How about other forms? What about the accounting and business advisory services you offer?

My initial response is to explain the process of preparing their return.  CPA’s typically do not operate like a “tax return preparation mill”; you can surmise who those businesses are.  I tell them that if they choose to engage a “tax mill”, they can expect to spend 15 minutes in a chair sitting next to the preparer, getting their return completed.  This is certainly acceptable if you are a simple filer.  But most people that have a more complex tax return need additional “hand holding / advocacy and advice”.  Thus, CPA’s spend approximately one to three hours in meetings; phone calls; emails; and text messages with the tax client in order to ‘carefully’ prepare their tax returns.

So here is the industry average for a simple personal tax return:  The average fee charged to prepare an itemized Form 1040 with Schedule A and a state tax return is $273, and the cost for a Form 1040 without itemized deductions and a state return is $176.

TAX RETURN PREPARATION SERVICES BY FORM

The following table identifies some of the various tax preparation forms and their related fees.  This matrix is a benchmark and should be used to help you budget your tax preparation expenses.  Average fees to prepare the following forms include:

Form 1040 with a Schedule A and state return	$273
Form 1040 (non-itemized) and a state return	176
Form 1040 Schedule C (business)	184
Schedule D (gains and losses)	124
Schedule E (rental)	135
Schedule F (farm)	180
Form 1065 (partnership)	656
Form 1120 (corporation)	826
Form 1120S (s corporation)	809
Form 1041 (fiduciary)	482
Form 990 (tax exempt)	733
Form 940 (federal unemployment)	69
Form 706 (estates)	1,563
Form 709 (gift tax)	413
Form 8824 (like-kind exchanges)	242
Form 5500 (pension/profit-sharing plans)	532
Form 3115 (application for change in accounting method)	282
Form 8962 (premium tax credit calculation)	59
Form 8965 (health coverage exemptions)	53
Form 1095‐A (health insurance marketplace statement)	58
Shared Responsibility Payment Calculation	57
Form 4562 Fixed Asset & Depreciation (Depends on # of assets)	135

DISORGANIZED OR INCOMPLETE FILES

Most CPA firms charge additional fees if the client is not prepared to have their return filed timely.  Thus, firm’s charge an added fee for disorganized or incomplete files; known in the industry as a “paper bag job”.  Some firm’s charge an additional fee for “Late Filing Extensions”.  Additionally you can expect to be charged an additional fee to expedite your tax returns.  Some CPA’s charge a fee for information received after a set deadline.  This occurs when the preparer has to set aside your tax return and wait for you to gather the requested information.  Once received, the preparer has to reacquaint themselves with the ‘shelved return’.  As a result, CPA firms charge for this time.

TAX AUDIT

Average hourly fee for an in-person IRS audit is $150.

Average fee for an IRS audit response letter is $128.

OTHER CLIENT SERVICES

You can anticipate the following as an hourly fee - budget benchmark for these various client services:

Offers in Compromise (Form 433a; 433b; & 433f)	$177
Estate/Financial Planning	163
Financial Services	144
Tax Services (IRS Correspondence)	145
Management Advisory Services	146
Elder Care Financial Services	131
Financial Statement Presentation (Management Report)	134
QuickBooks or Bookkeeping Advisory Services	97
Write-up Work	93
Payroll Services	83

Source: CPA Practice Advisor