Average Cost of Tax Preparation by CPA for 2025

The average cost of tax preparation by CPA varies depending on the complexity of the return and additional services required. Tax season is often overwhelming, and it can get confusing as you are trying to figure out if you will need professional help to complete your tax return. CPAs help to ensure tax compliance, accuracy, and deduction maximization. But knowing how much CPA tax preparation will cost is important for individuals and companies that want to keep a close eye on the details. 

The following article covers what average CPA tax preparers charge, what a small business can expect to pay, and how these costs differ state by state. Whether you’re a individual taxpayer or a small business owner, knowing these factors can help you make informed decisions. 

Average Cost of Tax Preparation by CPA

Many individuals wonder if the average cost of tax preparation by CPA is worth the investment for their financial needs. If you’re thinking of using CPA services for tax preparation, you’ll know that the prices vary significantly depending on how complicated the return is, who does the CPA work, and the number of additional forms you need.

The average cost of tax preparation by CPA includes a wide range of services, from filing basic returns to offering tax-saving strategies.

Personal Tax Returns 

The average cost of tax preparation by CPA for personal tax returns typically ranges from $150 to $450. Refunds with no itemized deductions or supplements fall at the bottom of this range. But fees are much higher for filers with: 

• Itemized deductions (Schedule A).  
• Investment income (Schedule D).  
• Rentals or side projects (Schedule E). 

Individuals with investments or rental properties may find the average cost of tax preparation by CPA justified for maximizing deductions.

Factors That Influence Costs  

A few factors influence how much a CPA will charge for tax preparation: 

• Complexity of the Return: The higher the fees, the more multiple income sources or deductions (e.g., independent contractors). 
• Paper Work: The more forms and receipts a CPA has to process, the more they will cost. 
• Tax Planning: Some people want advice on tax strategies and this is a large expense. 

Additional Services  

Most CPAs provide something more than simple tax preparation, like financial planning or audit assistance. These services are nice but at a premium. People should always ask questions upfront about all possible charges so that they are not shocked. 

Read more: How to Pay No Taxes on Rental Income: 14-Day Rental Rule

Average Cost of Tax Preparation by CPA for Small Business

For small business owners, the average cost of tax preparation by CPA can range significantly based on business size and structure. Small companies generally need more complex tax preparation services than the average individual.

Tax preparation for small businesses by CPA is usually $500 to $2,000, depending on the size and nature of the business. Solo proprietorships generally have a lower price point, while partnerships and LLCs with multiple partners or complicated books may have more.

The average cost of tax preparation by CPA for partnerships varies depending on the number of partners and shared income.

Services Included for Small Businesses  

CPAs typically offer small business-specific services, such as: 

• Submitting business income tax returns (Forms 1065, 1120, or 1120S). 
• Calculating and filing payroll taxes on employees. 
• Managing sales tax filings.  
• Addressing business-specific deductions and credits.  

Such supplementary services not only add value but also increase costs. 

Specialized Small Business Needs  

Many small business owners prioritize the average cost of tax preparation by CPA in their annual budgeting. Some sectors like construction or medical need more detailed knowledge about the industry’s tax regulations. Expert CPAs who specialize in these areas may charge higher rates for their expertise. 

The Benefits of CPA Knowledge 

Although it might be expensive to get started, many small companies can benefit from a CPA over time. Proper tax filing lowers audit chances and helps businesses take full advantage of all the deductions that are available. Additionally, CPAs can provide tips on how to plan taxes to create long-term savings.

Read more: 4 Strategies of How to Avoid Paying Taxes on Settlement Money

Average Cost of Business Tax Preparation by CPA

The average cost of tax preparation by CPA reflects the time and expertise required to handle complex tax situations. When it comes to larger companies and partnerships, tax filing gets even more complicated with in-depth financial analyses and federal and state filing requirements. The average business tax filing fees by a CPA are $1,000-$5,000 and higher, depending on the complexity of the business structure and experience of the CPA. For small businesses, the average cost of tax preparation by CPA often includes additional services like payroll or bookkeeping.

Cost Breakdown by Business Type  

The average cost of tax preparation by CPA for corporate filings can exceed $2,000 for companies with complex financial needs.

Effect of Business Complexity on Costs 

The more sophisticated the financial state of a company, the more CPA fees are involved. Factors contributing to complexity include:  

• Multiple revenue streams.  
• International operations or income.  
• Multiple transactions, needing to be closely scrutinized. 

Rules that relate to a specific type of activity (e.g., manufacturing or real estate). 

Researching the average cost of tax preparation by CPA in your area can help you budget effectively for tax season.

Additional Services for Businesses  

In addition to tax advice, CPAs frequently offer: 

• Statements (balance sheets, income statements)
• Tax planning and strategy development.  
• Assistance with IRS audits or investigations. 

These are generally sold individually, but can be combined for businesses that need full financial control. 

CPA vs.  Independent Tax Preparer  

Hiring a CPA ensures compliance, but understanding the average cost of tax preparation by CPA is crucial before proceeding. Whether you’re hiring a CPA or a self-employed tax preparer, knowing the major differences in experience, expertise, and fees can help you decide what’s right for you. Compared to independent preparers, the average cost of tax preparation by CPA tends to be higher due to their expertise and qualifications.

• Qualifications and Expertise  

CPA: Certified Public Accountants are licensed accountants that require extensive education and testing. They are familiar with complex tax challenges, business restructuring, and audit services. 

Tax Preparers: Can provide basic tax preparation and may possess certifications such as the IRS Annual Filing Season Program. Although able to manage simple returns, they might be unable to navigate financial issues. 

• Cost Differences  

CPAs: In general, the higher fees reflect their knowledge and ability to handle more challenging tax issues. CPAs generally charge between $200 and $5,000, depending on the type of services rendered. 

Independent Preparers: Cheaper, anywhere from $50 to $300 for basic returns. But they might not provide the same level of services as CPAs. 

• When to Choose a CPA  

If your business is complicated with taxes, or if you have investments, real estate, or foreign revenue, you should consult a CPA. 

CPAs are also perfect for any type of tax planning, financial consulting, or auditing services. 

Knowing the average cost of tax preparation by CPA helps taxpayers decide whether to hire a professional or file on their own.

What To Expect When You Hire an Independent Tax Preparer? 

While the average cost of tax preparation by CPA might seem high, the long-term savings from accurate filings often outweigh the expense.

If you’re preparing a simple tax return with no itemized deductions or fancy schedules, an independent preparer is your best option. This strategy is ideal for people with a single source of income and relatively low level of financial detail. 

Read more: Upcoming IRS Tax Changes 2025 You Need to Know

Cost Differences by State  

Tax filing fees for CPA in a typical year will vary based on the state you are living in. Factors such as state regulations and cost of living affect the average cost of tax preparation by CPA across the U.S.

• States with Higher Costs  

California, New York, and Massachusetts have higher CPA fees. For example:  

A typical personal tax return can run $300–$500. 

If your business is very complex, it may cost over $2,000 to prepare your taxes. 

• States with Lower Costs  

In more inexpensive states, like Texas, Florida, and Tennessee, CPA costs are usually lower. 

Tax preparation for yourself can range between $150–$300. 

For a business, this costs approximately $750–$1,500. 

• Factors Influencing Regional Costs  

State Tax Code: States that do not levy income tax (TX, FL) might have easier taxes to comply with, and therefore may require less work to prepare. 

CPA Demand: Tax specialists may be more expensive in areas where the demand is high. 

Urban vs.  Rural: Due to the higher living expenses and demand, the CPA fees are generally higher in the cities than in the countryside. 

Regional differences in the average cost of tax preparation by CPA can be significant, especially between urban and rural areas.

How to Find State-Based Cost Estimates? 

• Calculate the average tax preparation cost in your state 
• Find local CPA firms and ask for quotes. 
• Compare prices online for similar services in your community. 
• Consider speaking with CPA professional associations within your state. 

CPAs often provide an estimate of the average cost of tax preparation by CPA based on the scope of the work.

The average tax preparation by CPA varies from state to state. Here is a table comparing estimated personal and business tax filing fees by region:

Questions You Should Ask Your CPA Before Hiring

The average cost of tax preparation by CPA might seem daunting, but the benefits of professional expertise can make it worthwhile.

If you need your taxes prepared, it’s important to select the right CPA to help you prepare correctly and save the most money. Be sure to ask these important questions before you sign the contract to confirm their competence, honesty, and suitability to your needs: 

1. What Are Your Experiences With Similar Taxes? 

For small businesses or those who have special tax needs like foreign income or investment, make sure the CPA is familiar with it. 

Ask for references of past clients who have been in the same position and how they maximized their tax deductions. 

2. How Are Your Fees Structured?  

Check if they have an hourly, flat-rate, or per-form charge. 

Ask for an up-front breakdown of the estimated costs so you’re not left behind. Some CPAs, for instance, add on extra schedules, bookkeeping services or special requests. 

3. Can You Take Tax Planning Beyond the Tax Season? 

Tax filing is only one aspect of accounting. Year-round CPAs can advise on tax planning, financial management, and audit assistance. 

If you’re looking for long-term planning, look for CPAs who provide these services. 

4. What About Accuracy and Compliance? 

Learn about how they review your tax returns and ensure you meet federal and state tax regulations. 

Ask how they handle IRS audits and if they’ll represent you if necessary. 

5. Can You Give Us Any Referrals Or Reviews? 

Good CPAs have happy clients who’ll tell you about their experience. 

Look up reviews on trade directories or request information from previous clients (if allowed) to see if they are trustworthy. 

6. What Documents Do You Expect from Me? 

You can plan and save money on fees when you know what you need upfront. Organized documents save the CPA a lot of time when it comes to your return and save you money. 

7. What Is Your Communication Style?  

Find out how they like to communicate — email, phone, or in person meetings — and whether they will be open to answering your questions along the way. 

8. Do You Offer Any Guarantees?  

No CPA can guarantee exact outcomes, but they should vouch for their work. Ask them what support they offer if something goes wrong or the IRS contests your return. 

Answering these questions will enable you to confidently choose a CPA who fits your expectations and gives you a stress-free tax season. 

FAQs

1. What is the Difference Between The CPA Tax Preparers?

CPA rates vary based on how complicated your tax return is, the expertise required, and where you live. Fees can be added for additional services, such as tax planning, financial statements or audit assistance.

2. Is it Worth Paying a CPA for A Simple Tax Return?

For small returns without itemized deductions, a CPA isn’t a viable option. In that scenario, you might save some money by hiring a free tax preparer or tax software. However, if you anticipate future tax challenges, having an agreement with a CPA can be advantageous.

3. What Can I Do To Lower My Tax Preparedness Fees?

To lower your CPA fees:

• Organize your banking information before the meeting.
• Track your expenditures and revenue using an accounting program throughout the year.
• Identify exactly what services you need to avoid overpaying.

4. How Much Does Business Tax Filing by CPA In My State Cost On Average?

It depends on state tax laws and the complexity of the business to understand how much business tax preparation can cost. For example:

• In expensive states, such as California, complex business returns can cost more than $3,000.
• The fees can run between $750–$1,500 in low-tax states, such as Texas.

5. Are CPA Fees Included in My Taxes?

Occasionally, CPA costs associated with preparing business taxes or financial planning are tax deductible. In personal tax returns, as of 2017, under the Tax Cuts and Jobs Act, the IRS no longer allows deductions for tax preparation.

Useful accounting programs

Understanding the average cost of tax preparation by CPA can help individuals choose between a CPA and tax software. Here are some recommended accounting programs:

1. QuickBooks Online
   Comprehensive accounting software for small to midsize businesses.
   Visit QuickBooks Online
2. Xero
   Cloud-based accounting platform with real-time financial data features.
   Visit Xero
3. FreshBooks
   User-friendly accounting software for freelancers and small business owners.
   Visit FreshBooks
4. Sage 50cloud
   Robust accounting software with features like payroll and inventory management.
   Visit Sage 50cloud
5. Wave
   Free accounting software ideal for small businesses and freelancers.
   Visit Wave

Business owners should compare the average cost of tax preparation by CPA with the potential tax savings a professional can offer.

Conclusion  

Knowing how much a CPA will normally charge you for filing taxes is an important part of budgeting and finding the best CPA for you. CPAs may be more expensive, but their knowledge guarantees compliance, accuracy and savings over the long haul. The average cost of tax preparation by CPA typically increases for clients requiring audit support or representation.

For individuals or business owners, understanding your tax burden and financial objectives will help you choose between a CPA and other tax preparation services. 

If you’re filing a complex tax return, the average cost of tax preparation by CPA is an investment in accuracy and peace of mind.