How Much Does a CPA Cost? The Ultimate Guide

how much does a cpa cost
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If you’re a business owner who needs accounting help, knowing the cost of hiring a Certified Public Accountant (CPA) is crucial.

As someone who runs my own business, I spend hours researching monthly accounting fees for small business, factors that affect their costs, and more.

How much does a CPA cost, you ask? You’ve come to the right place for answers.

I wrote this guide to inform you how to make smart choices and plan your budget. Reading my guide can help you with your tax filing, planning your finances, and other accounting tasks.

Let’s begin.

What Are the Duties of a CPA?

A Certified Public Accountant (CPA) earns their certification by meeting their state’s specific licensing requirements. This certification distinguishes them as accounting professionals with specialized expertise.

A CPA takes on various roles and responsibilities.

  • They actively work as a chief financial officer (CFO) for large companies, overseeing financial matters.

  • They conduct audits on financial statements to ensure accuracy.

  • They consult on accounting and tax-related issues as advisors and consultants.

With their certification and qualifications, CPAs bring valuable insight and support to the business world through financial data.

How Much Does a CPA Cost?

The cost of hiring a CPA depends on the types of tax forms they’re filing, their experience, the state where they’re filing, and several other factors.

CPAs may charge hourly, per form, or according to the specific service they will provide.

With hourly rates, the number of billed hours will depend on the specific service provided and the organization of your files.

Note: Hiring an accountant to handle your business taxes independently is a business expense, making it eligible for tax deductions.

How Much Does a CPA Charge Per Hour?

According to a National Society of Accountants report on CPA income, here are the average CPA hourly billing rates.

  • Tax services – $174

  • Federal or State tax return – $180

  • Full payroll services – $100

  • Quickbooks or bookkeeping advisory services – $109

  • Financial services – $154

How Does CPA Pricing Work?

Here are three methods CPAs use to determine the cost of their services.

Hourly Pricing

A CPA charges clients according to the number of hours they work.

A CPA hourly rate is straightforward but may lack transparency if the CPA doesn’t clarify how they used the hours.

Fixed Pricing

Some CPAs use the fixed pricing model to charge for specific services. Most clients prefer a fixed Fee, but it may not suit all services a CPA provides.

For example, consulting engagements can vary significantly in scope and complexity. Thus, charging a fixed CPA consultation fee accurately reflecting the value and effort required can be challenging.

Value Pricing

This method emphasizes the value of the service the CPA provides. The CPA assesses the worth of the service and sets the price accordingly.

Implementing value pricing requires a thorough understanding of the client’s needs and preferences, making it more complex.

What Factors Affect the Cost of CPA Services?

Several factors can affect the cost of hiring a CPA:

  • Location

    CPA rates in urban areas may charge more than those in rural areas.

  • Expertise

    CPAs with more experience and specialized knowledge may charge higher fees.

  • Types of Service

    The CPA fee depends on the specific service you need (tax preparation, auditing, etc.), with more complex services generally being more expensive.

  • Size of the Business

    The small business CPA cost is often more affordable than that of large businesses for the same services.

  • Number of Assets

    Possessing many assets may increase the time and effort the CPA requires to complete the task, thus increasing the amount you pay for accounting services.

  • Task Complexity

    CPAs often charge more for complex tasks, like bookkeeping cleanup or financial statement development.

  • Billing and Collections

    Efficient billing and collection practices can impact a CPA firm’s profitability and ultimately affect its fees.

How Much Does a CPA Cost for Small Business?

how much does a cpa cost

The cost of accountant for small business depends on the industry, bookkeeping methods, and company size.

According to SCORE, many small business owners spend an annual fee of at least $1,000 on accounting administrative costs, internal expenses, and legal fees.

SCORE also says that typical accounting fees for small businesses cost between $1,000 to $5,000.

However, remember that these are just estimates, and costs will still depend on the size of your business, the CPA’s pricing model, and other factors.

Include accounting costs in your budget if you are a new business owner, and consider reassessing accounting costs if you are an experienced owner.

How Much Does a CPA Charge To Do Taxes?

How Much Does a CPA Charge To Do Taxes?

If you need a professional accountant for occasional tasks like tax preparation, here’s a general idea of the costs.

  • Personal tax returns (if you’re not incorporated): $200 to $500

  • Business tax returns (if you’re incorporated): $800 to $1,800

The National Society of Accountants (NSA) reports that the average fee for filing individual taxes without itemized deductions is around $176.

Business tax preparation tends to cost more due to additional requirements and complexities. The exact cost depends on your business type and the forms you need to file.

For other accounting services like audited financial statements, the costs will vary based on your business’s complexity and specific needs.

Here are the general cost ranges.

  • Financial statement: $1,000 to $2,500

  • Audit: $2,000 to $5,000

Note: These are approximate figures, and actual costs may differ based on various factors. Consult an accountant to get an accurate cost assessment for your requirements.

What Are the Average Fees of Tax Preparation by Form?

Let’s break down the average cost of tax preparation according to the CPA form.

  • The average basic federal and state return cost is approximately $220.

  • Form 1040, with the standard deduction and a state income tax return, has an average cost of $220.

  • Preparing Form 1040 with Schedule A to itemize personal deductions and a state income tax return has a flat fee of $220.

  • Form 1040, with Schedule A to itemize personal deductions and a state income tax return, has a flat fee of $323.

  • Form 1120S (S corporation) has an average price of $903.

  • The average cost for most individual tax returns is $700, while corporate tax preparation generally costs $1,000.

Note: These figures are averages, and the actual cost of tax preparation can vary. Several factors influence the cost, including the complexity of the return, the CPA’s location, and their expertise.

What Factors Affect the Cost of Your Tax Return?

Here are several factors that affect the cost of your tax return.

The Complexity of Your Return

The fees you pay depend on how complex your return is. Multiple sources of income, specific tax credits, and life changes throughout the year can increase the cost.

Type of Return

The type of return you file influences the price. For example, preparing Form 1040 with Schedule A and a state income tax return can cost a flat fee of $200 or more.

Preparer’s Skill Level and Expertise

The expertise of the preparer matters. CPAs and tax attorneys charge higher rates than seasonal workers.


Adjusting the amount withheld on your W-4 form can affect your tax position. Adding extra withholding can result in a refund or prevent owing too much.

Mistakes on Your Return

Errors in calculating credits like the Earned Income Tax Credit or Child Tax Credit can lead to inaccuracies on your return, affecting your refund or tax owed.

What Factors Influence the Cost of Hiring Tax Professionals?

The factors influencing the cost of hiring a CPA to prepare business taxes include the location, the CPA’s expertise, and the tax return’s complexity.

How much does an accountant cost for taxes? Here are some estimates.

Tax Service Average Cost

The NSA reports that CPAs bill an average of $174 per hour for tax preparations in 2020 and 2021.

Average Cost for Small Business Owners

On average, a small business owner can expect to pay around $1,500 to a CPA firm to prepare individual and business tax returns.

However, the actual cost depends on factors like the type of return, the number of states involved, the number of partners, the size of assets held, and the nature of business activities.

General Costs

Businesses can anticipate paying approximately $3,000 for professional tax preparation services.

Other Price-Determining Factors

If you have disorganized accounting records, you may incur additional costs for your CPA team to clean up your books and create a well-presented financial statement.

Accounting service fees vary depending on the specific service, with bookkeeping fees typically being the most affordable due to their basic nature.

How To Lower the Cost of Preparing a Tax Return

Here’s how to lower the average cost of tax preparation by CPA for small business.

Seek Free Assistance.

Check if you qualify for free tax prep services through IRS audit programs like Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE).

They cater to individuals with lower incomes, disabilities, limited English proficiency, or those over 60.

Compare Prices.

Look for a tax preparer who offers reasonable fees. Although negotiating fees is uncommon, it’s worth exploring.

Maximize Tax Credits.

Take advantage of available tax credits to reduce your tax liability. Credits are preferable to deductions as they directly lower the tax owed.

Contribute to Retirement.

Lower your taxable income and tax bill by contributing to a retirement account.

Deduct Self-Employed Health Insurance

If you’re self-employed, deduct your health insurance premiums as a business expense.

Stay Organized.

Gather all necessary tax documents, such as income and expense records, to streamline the tax preparation process. Organized records save time and potentially lower fees.

Keep Receipts Handy.

Whether itemizing deductions or claiming the standard deduction, maintain all receipts to ensure you capture all eligible deductions.

Deduct Tax Preparation Fees.

Deduct Tax Preparation Fees.

While you may deduct tax preparation costs, you can only claim the accrued amount, not the entire cost. Be aware of any limitations when deducting these fees.

What Are Alternatives To Filing Taxes With a CPA?

Here are some alternatives to filing taxes with a CPA.

Tax Accounting Software

Use programs like TurboTax, FreeTaxUSA, and H&R Block to calculate and file your own tax return. They are cheaper than hiring a tax professional.

E-File-Approved Commercial Software

The New York State Department of Taxation and Finance has a list of approved software developers that format and submit your tax information accurately.

Free File Option

The New York State Department of Taxation and Finance offers a Free File option for eligible individuals with a federal adjusted gross income (AGI) of $73,000 or less.

Credit Karma Tax

Credit Karma Tax is free software for filing state and federal taxes, especially suitable for simpler tax filings.

Free Tax Assistance

The US Internal Revenue Service (IRS) provides free tax assistance programs to help eligible taxpayers file their returns at various locations.

How Much Do CPAs Charge for Other Services?

The average CPA price for specific services depends on many factors, but here are some examples.

Tax Preparation Fees

The National Society of Accountants reports that a CPA’s average cost of tax services is $174 per hour.

The cost of tax preparation can vary depending on the type of return. For instance, corporate tax returns (Form 1120) average $903, while Schedule C costs around $192.


Audits are the most expensive CPA service, with an average fee of $1 million for audit-related services in 2019.

Bookkeeping and Accounting

The cost of accounting and bookkeeping services depends on the specific needs. Bookkeeping fees are typically lower while accounting services are pricier.

For example, landlords may pay approximately $200 per month per property for bookkeeping, and the cost of cleaning up books can vary between a bookkeeper’s average hourly rate and a CPA’s hourly rate.

Other Services

Additional CPA services like Quickbooks or bookkeeping advisory services can cost around $154 per hour, while financial statement audits may be about $170 per hour.

Remember, these figures are averages, and the actual price of CPA services can vary.

How To Find the Best CPA For You

Follow these steps to find the best Certified Public Accountant for you:

Ask for Recommendations.

Start by asking for recommendations from friends, family, or colleagues who have used the services of a CPA. They can share their experiences and suggest reliable professionals.

Research Online.

Google is your best friend when it comes to finding the best CPA. Look for find directories or listings of CPAs in your area and contact professionals with positive reviews and ratings.

Check Credentials.

Ensure that the CPA you consider has the necessary qualifications and certifications.

Look for designations like “CPA” or “Certified Public Accountant” after their name. Verify their credentials on official websites or through state licensing boards.

Assess Experience

Determine how long the CPA has been practicing and whether they have experience in the specific areas you require assistance with, like tax preparation, audits, or financial planning.

Meet for a Consultation.

Schedule a consultation with potential CPAs to discuss your needs and assess their expertise. Prepare a list of questions to ask about their services, fees, and how they can help you achieve your financial goals.

Evaluate Communication Skills.

During the consultation, pay attention to how well the CPA communicates complex financial concepts.

A good CPA should be able to explain things clearly and patiently, especially to someone unfamiliar with financial matters.

Inquire About Fees.

Ask about the CPA’s fee structure and billing practices upfront. Some CPAs bill an hourly rate, while others have fixed rates. Choose a professional whose pricing aligns with your budget and needs.

Request References

Don’t hesitate to ask for references from past or current clients. Contact these references to gather more information about the CPA’s reliability, professionalism, and quality of service.

2 Ways to Verify a CPA’s Credentials

Here are two ways to verify a CPA’s credentials:

Use CPA Verify.

This website is a reliable tool for checking the credentials of a CPA or CPA firm. It provides a national database of licensed CPAs and firms using official data from state regulatory boards.

You can access CPA Verify to determine the credentials of a CPA or firm without searching through multiple websites.

It also provides information on enforcement or disciplinary actions, giving you more confidence when hiring a CPA.

Contact the State Board of Accountancy.

To verify a CPA’s active license, contact the State Board of Accountancy, where the CPA got their license.

Each state has its own Board of Accountancy, and you can find a list of these boards on the American Institute of CPAs (AICPA) website.

Contacting the relevant State Board of Accountancy will help you confirm the validity and status of a CPA’s license.

Is Hiring a CPA Worth It?

Consider the following factors before hiring a CPA.

The Complexity of Your Taxes

Using tax software might be enough if your tax situation is straightforward and you want to file taxes yourself.

If you have a complex financial situation involving business ownership or investments, hiring a CPA can ensure accurate filing and help avoid potential penalties.

Comfort Level With Taxes

If you feel confident in your tax knowledge and have no concerns about filing correctly, a CPA certification may not be necessary.

However, if taxes make you uncomfortable or you lack time to learn, hiring a CPA provides the reassurance of professional assistance.

Cost of Hiring a CPA

The fees for a CPA’s services depend on your tax return’s complexity, filing location, and other factors.

What Are the Benefits of Hiring a CPA?

Here are some of the benefits of hiring a CPA.

Expertise and Knowledge

CPAs undergo rigorous training and exams to gain their certification.

They possess deep knowledge of accounting principles, tax laws, and financial regulations, ensuring accurate guidance and handling of your financial matters.

Tax Compliance and Savings

CPAs help you navigate complex and ever-changing tax laws.

They ensure compliance and identify deductions, credits, and incentives that can save you money. CPAs can also develop effective tax strategies to minimize your tax liability.

Financial Planning and Guidance

A CPA is a certified financial planner and tax advisor. They can assist in creating sound financial plans, tax advice, setting goals, and tracking progress.

They provide advice on investments, retirement planning, and estate planning, helping you make informed decisions for your financial future.

Business Support

CPA firms handle various financial aspects for business owners, such as bookkeeping, payroll processing, financial statements, and tax compliance.

They offer insight into financial health, identify areas for improvement, and guide growth, cash flow, and profitability.

Time and Stress Savings

Hiring an accountant frees up your time and relieves the stress of managing finances, especially during tax season.

They handle complex tasks, paperwork, and tax filings accurately, allowing you to focus on other important aspects of your life or business.

Audit Assistance

In the event of an audit, having a CPA on your side provides valuable advice and support. They can guide you through the process, represent you before tax authorities, and protect your rights.

Frequently Asked Questions (FAQs)

Can You Save Money if You Hire a CPA?

Hiring an accountant can save you money in several ways. They have specialized knowledge of tax laws and can find deductions, credits, and exemptions to lower your tax liability.

They also help you avoid costly bookkeeping and financial reporting mistakes that could lead to penalties.

Accountants provide valuable financial analysis and business planning to help you cut costs, maximize resources, and improve profitability.

You can also focus on your core activities by handing financial tasks to an accountant.

Can I Handle My Company’s Taxes Without the Help of an Accountant?

While you can prepare your company’s taxes yourself, remember that business taxes can be complex. You must know applicable laws, tax codes, and regulations.

Gathering and organizing financial documents, completing forms accurately, and staying updated on changing tax rules can be time-consuming.

Mistakes on your tax return can lead to penalties or audits. Hiring an accountant may benefit your business if your business has unique situations or complexities.

What Will Happen if You Miss the Tax Deadline?

Missing the tax filing deadline can lead to late filing penalties and accumulating interest charges on unpaid taxes.

It can also cause delays in receiving tax refunds or credits and increase the risk of an audit or closer scrutiny.

Filing it on time is crucial to avoid these consequences and limited options for resolution.

What’s the Difference Between an Accountant and a Tax Preparer?

Tax Preparer

A tax preparer focuses on the preparation and filing of tax returns. They usually have specialized knowledge of tax laws and regulations.

Tax preparers can include enrolled agents (EAs) or tax preparation professionals who receive specific training in tax preparation.

They usually charge lower fees than accountants because of the limited scope of service.


An accountant provides a broader range of financial services beyond tax preparation.

They can handle tax planning, financial analysis, and bookkeeping and may guide you on business or financial decisions.

Accountants typically hold professional certifications such as Certified Public Accountant (CPA) or Chartered Accountant (CA). They can charge higher fees than tax preparers because of their broader expertise and qualifications.

The Bottom Line

I hope you found my guide helped you answer the question, “How much does it cost to hire a CPA?”

Use the information in my guide to make a well-informed decision when looking for a CPA and ensure you receive quality services tailored to your needs.

Remember, a CPA’s expertise can save you time and money and provide peace of mind in managing your financial matters.

If you run a small Amazon-selling business and want to file taxes yourself, looking at the best accounting software for Amazon sellers is ideal.

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