Average Cost of Tax Preparation by CPA: How to Pay Less
What does your return actually require? A basic Form 1040 fee may exclude the additional schedules for self-employment income, rentals, or investment sales, along with extra state returns. A business may also need a separate entity return. The average cost of tax preparation by CPA only helps when you know which filings the fee covers.
A fee above the average doesn’t necessarily mean you’re overpaying. The CPA may have included more services or allowed time to correct incomplete or inconsistent records. Use the basic return benchmark below to check your quote’s scope, then ask which records you can organize yourself before paying for that work.
Quick answer and key takeaways
Quick answer: The Accounting Podcast reports a $280 average for a basic CPA-prepared Form 1040, attributing the figure to the 2025 NATP Fee Study. That benchmark for the average cost of tax preparation by CPA doesn’t cover every filing. Additional schedules, state returns, separate business returns, and accounting work can change your bill.
Key takeaways
- The basic-return average doesn’t represent your full preparation bill.
- State returns and extra schedules can add to the fee, depending on what your quote includes.
- Complete, organized records may spare you a separately billed cleanup.
- Get the services covered by your quote in writing.
- Better records don’t guarantee a specific savings amount.
How much does a CPA charge to prepare taxes?
The Accounting Podcast cites the 2025 NATP survey’s average cost of tax preparation by CPA: about $280 for a basic Form 1040. A quote covering investment sales or business and rental income includes reporting beyond that basic return. Itemizing adds Schedule A to your preparation quote. Your tax records and agreed services affect the fee, along with the preparer’s location.
Business income doesn’t always mean a separate return: sole proprietors attach Schedule C to Form 1040. Partnerships file Form 1065, S corporations use Form 1120-S, and C corporations use Form 1120. A quote for your personal return may not include the entity return.
Typical preparation costs by tax return type
The average cost of tax preparation by CPA for a basic return doesn’t price every filing below. The fee survey findings explain why additional forms can increase fees.
| Return type | Typical form or schedule | Benchmark or pricing basis | What can increase the cost |
|---|---|---|---|
| Basic individual | Form 1040 | About $280 (2025) | State filings or extra schedules |
| Itemized individual | Form 1040, Schedule A | $300–$600 in NSA’s 2024 survey; mixed preparer credentials | Deduction records needing review |
| Sole proprietor | Form 1040, Schedule C | Individual return plus business schedule | Bookkeeping corrections |
| Rental owner | Form 1040, Schedule E | Individual return plus rental schedule | Rental records needing work |
| Partnership | Form 1065 | Separate return quote | Accounting work and schedules |
| S corporation | Form 1120-S | $750–$1,250 in NSA’s 2024 survey; mixed preparer credentials | Bookkeeping and additional reporting |
| C corporation | Form 1120 | Entity return priced separately | Accounting cleanup |
The basic Form 1040 figure comes from an industry transcript reporting the 2025 NATP survey. The itemized Form 1040 and Form 1120 ranges come from the NSA’s 2024 survey summary, whose respondents included several preparer credentials. Those ranges provide broader pricing context, not CPA-only averages or current quotes. No verified nationwide CPA average is provided here for the remaining rows.
Why can your CPA quote be higher than the average?
A higher quote may cover tax reporting that the basic-return average leaves out. The average cost of tax preparation by CPA won’t account for your particular mix of forms or the condition of your books.
Schedule C business income and rental income require their own schedules within your individual return. Investment sales and income reported on K-1s can require additional review. A K-1 still needs review for your personal return when another preparer handles the separate business filing.
Preparing that business return is separate from preparing Form 1040. Your quote may also include Schedule A for itemized deductions and returns for additional states.
The CPA may also need to correct the numbers before using them. If bank and credit card accounts haven’t been matched to their statements, the books may need separately billed bookkeeping cleanup and reconciliation. Without the missing records, the CPA may not be able to resolve a transaction. Personal charges mixed with business expenses and payments assigned to incorrect accounts also need attention before filing.
According to the NATP fee study, geography and the preparer’s experience or specialization influence fees. Firms also price work differently, so identical records don’t necessarily produce matching quotes.
What does a CPA's tax preparation fee include?
Your engagement letter or written quote defines what the preparation fee covers. Check for federal return preparation and each of the required schedules.
- State returns: A federal preparation quote may leave out state filings or e-filing. Check the quote for any separate charges for those services.
- Revisions and questions: Does the quoted fee cover a change before filing? Ask whether answering your questions afterward carries another charge.
- Separate coverage: Bookkeeping cleanup and year-round tax planning require specific agreement, as do amended returns, responses to IRS notices, and audit representation. A revision before filing involves different work.
Before comparing a quote with the average cost of tax preparation by CPA, request a clear written estimate. The Taxpayer Advocate Service recommends a written preparation and filing estimate.
For individual and business tax preparation, H&S Accounting & Tax Services determines the agreed work from your return’s requirements and the tax records available. A low advertised starting fee may leave out extra schedules or the accounting corrections your return needs.
How do CPAs calculate tax preparation fees?
A CPA may quote for the return, charge an hourly rate, or start with a minimum and add fees for extra schedules or complexity. The 2025 fee study describes the minimum-fee approach, including adjustments for complexity or value.
An hourly rate doesn’t tell you how many hours your return will need. A quote for specified filing work sets out what the CPA expects to prepare. Ask whether that amount is fixed for the agreed work or remains an estimate. Neither hourly billing nor a scoped quote is automatically cheaper.
An additional state return changes the filing work. Correcting business accounts adds accounting work before the CPA can use those figures. Either can change what you pay under the original proposal. The agreement should explain how the firm prices added services and communicates a revised fee.
How can you pay less for CPA tax preparation?
The average cost of tax preparation by CPA doesn’t show what a firm might charge to sort duplicate documents or correct your books. Complete, usable records may help you avoid paying for that work. Required schedules and accurate reporting still apply. None of these steps guarantees a particular fee reduction.
- Send records once, using your CPA’s checklist. The documents needed depend on your return. Include investment reports and last year’s return alongside W-2s and 1099s. Add relevant mortgage and charitable records. Remove duplicate copies before sending the requested records. Our tax preparation checklist and tips covers organizing these records. The IRS preparation checklist provides another starting point, although it addresses free preparation programs.
- Reconcile your business accounts first. Income and expense summaries should come from books you’ve checked against bank and credit card statements, with differences resolved. Check the transaction categories too. Guesses and unsupported adjustments can leave errors that carry tax risks and cost money to correct. Before doing the cleanup yourself, ask which tasks the CPA needs completed and whether supplying reconciled accounts would change the quoted fee.
- Ask about charges beyond return preparation. State returns and extra schedules may carry separate charges, along with cleanup, amendments, or tax planning. Disclose every income source, state, and entity before comparing the preparer’s quote with the average cost of tax preparation by CPA.
- Check whether free filing fits. IRS Free File or volunteer help through VITA and TCE may suit eligible taxpayers. Review current IRS filing options for eligibility and return limitations; these choices won’t fit every filing.
How should you compare CPA quotes before hiring someone?
A quote covering federal preparation alone isn’t comparable to one that includes state filings and bookkeeping cleanup. Once you’ve matched the services in the estimates, you can make comparisons with the average cost of tax preparation by CPA.
- Which filings does this price cover? Get a written list of federal and state returns, schedules, separate business returns, e-filing, and any other services you’re buying.
- When could the bill change? Ask about late documents and revised figures. Find out whether the price allows for cleanup, added schedules or state returns, and amendments.
- Who will handle your return? Find out who prepares and signs, then verify their qualifications. Look for the signer’s preparer tax identification number, too.
- Who answers questions after filing? Get contact details and ask whether questions about the filed return will cost extra.
- Will you get a complete copy? You’ll want this for your records.
An unusually low price deserves questions about what’s missing. A higher fee needs an explanation too. Request a written estimate, and avoid preparers who base fees on your refund size. The Taxpayer Advocate Service’s preparer fee guidance addresses both points.
H&S Accounting & Tax Services can provide a quote based on your forms and records.
When is paying a CPA worth the cost?
Incomplete business books can make a CPA’s help worthwhile because someone must resolve the accounting gaps before preparing the return. The quote should distinguish that bookkeeping from self-employment tax reporting. You may also want help working through rental activity or complicated investment transactions. Multiple state filings and separate entity returns add work too. You don’t have to hire a CPA for these filings. A quote above the average cost of tax preparation by CPA may reflect work your return actually needs.
Software may be enough when you understand how to prepare your straightforward return accurately. Review current IRS free filing options for a program whose eligibility and filing limits you meet.
CPAs and enrolled agents are qualified to represent you in IRS audits, collections, and appeals. The IRS describes these as unlimited representation rights in its IRS credential guidance. You still need to agree on that work first; paying for a return doesn’t automatically cover it. Year-round advice may also cost extra. Have the preparer identify the services included and price any work outside them.
Are CPA tax preparation fees deductible?
The personal portion of your preparation bill generally isn’t deductible on your federal return. Ordinary personal tax preparation fees aren’t among the deductions allowed in the Schedule A guidance.
For a sole proprietor, Schedule C generally allows the preparation fee connected to the business part of the return. The personal work on Form 1040 remains a personal expense, even if the CPA sends one bill for everything. Request an invoice breakdown that shows how much the preparer specifically charged for the business work. Publication 334 covers this allocation under business professional fees.
IRS guidance on rental preparation fees generally allows a rental deduction for the cost of preparing Schedule E, Part I. Allocate the bill to the relevant personal, business, and rental work. Receiving a 1099 alone doesn’t make the full CPA fee deductible.
Frequently asked questions
Does a CPA charge more for preparing prior-year returns?
The CPA will assess what’s needed to prepare that year’s return. Missing forms or figures that need correcting can add work to an older filing. A CPA may charge more for that work, but there’s no universal prior-year surcharge.
Can you hire a CPA only to review a tax return?
A return review requires a firm that offers that service. If it does, agree on the specific work and review fee before sending yours.
Does remote CPA preparation cost less?
An online appointment doesn’t establish the price of the tax work. Remote firms price the forms involved and may need to correct incomplete records before preparation. You’ll know which costs less after comparing prices for the same return and services under each firm’s billing terms.
Can a CPA charge separately for filing an extension?
Look at what you’ve agreed. Some quotes include requesting an extension; others price that work separately from preparing the return. The request concerns your filing deadline; it doesn’t postpone payment of tax owed. See the IRS extension guidance for that distinction.
Check your preparation quote before agreeing to the fee
A preparation quote should name the returns and schedules it covers. Gather the complete set of supporting records and check that the written estimate accounts for your state filings, all required forms, and any bookkeeping still needed. Ask what the firm will charge separately before accepting the fee.
Use the average cost of tax preparation by CPA as a reference while checking what your own estimate includes. If state returns or bookkeeping work are missing, ask how the firm will price them. To discuss your forms and records with H&S Accounting & Tax Services and request a quote, schedule a tax preparation consultation.
