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Average Cost of Tax Preparation For LLC by a CPA for SMBs in 2025
As tax season approaches, early planning is crucial. Many company owners seek the expertise of Certified Public Accountants (CPAs) for help with their tax preparation responsibilities. This highlights the problem of the average cost of tax preparation for LLCs, which may vary based on numerous criteria.
A National Association of Tax Professionals poll found that the average upfront cost to file a Schedule C company form is $192, with hourly fees at $149.95. Filing Form 1120 for companies typically incurs expenses of around $181.57 for filing and $913 for hourly preparation charges. Certain situations, such as incomplete documentation or filing extensions, may also increase the total price of CPA services.
However, several factors contributing to the high cost of CPAs include new tax legislation issues, rising national inflation rates, and a shortage of accountants. Of course, every company is different.
In this article, we’ll explore what influences tax preparation expenses, how to reduce those costs, and what to look for when choosing a preparer.
Factors Affecting The Average Price of Tax Arrangement By CPA For Business Owners
The typical cost of tax preparation costs fluctuates depending on each case. Here’s something to consider:
Type of Rates
Many CPAs charge by the hour for their tax services. Basic tax filing, such as a basic Schedule C company form for an individual or sole owner, may take only two or three hours, while more complex enterprises may need more time. Most CPAs start in the $150 to $200 per hour range, but some may charge $300 to $500 per hour.
Professional tax preparation services may rapidly become costly at an hourly rate, so it may be more beneficial for a small company owner to consider alternate solutions. Some CPAs may give monthly or annual retainers, which frequently work out at a reduced hourly charge. Others provide a fixed cost or set fee for their services, factoring in some of the other aspects stated.
Type of Income You Generate
If you just generate revenue via your business, it’s a more simple tax form that will take less time to prepare. Should you and your business also have rental properties or generate capital gains from investments, it will certainly increase the cost of tax preparation and the number of documents to complete.
CPA Location
Much like renting and vendor prices, the location of your CPA might affect pricing. Someone headquartered in a high-cost location such as California or New York often charges more than someone in Nebraska or Delaware. Some CPAs may also give a discount working online compared to in-person.
In most circumstances, it’s a good idea to deal with an individual small business CPA or corporation having a presence in the state where you conduct the most business. They are familiar with the local landscape and may suggest state-specific strategies to minimize your tax costs.
Types of Forms and Taxes
Filing in a state with no state income tax means one less form to fill out. However, just a few states don’t have state taxes, so you’ll certainly need that extra form at the state level.
CPAs will also examine your company entity type. There are distinct tax laws to follow for an S company vs a C company. For example, Form 1120-S (for S companies) likewise costs somewhat less to file than Form 1120 ($913 compared to $923), and the average cost of tax preparation for LLC enterprises varies from that of a S corporation.
Level of Expertise and Timing
A CPA with 20 years of experience will probably charge you more than a CPA with one year under their belt. The more experienced CPA has seen just about everything and can identify areas to focus on to maximize your tax deductions and increase your refund — or at least decrease your tax bill — and offer peace of mind you’re not missing anything while filing.
How close the tax deadline is also a factor. Similar to trying to book a flight or hotel at the last minute, should you wait until the thick of tax season to file taxes, you might find CPAs have increased their rates.
Complexity of Tax
If you simply want to submit a standard business tax return form (Schedule C Form 1040 or Form 1120) for your federal taxes without any additional forms or schedules, such as itemized deductions, tax return services will cost less than if you have other expenses, interest, and earnings to include. Working with freelancers and contractors also means needing to file 1099-NEC forms, which many CPAs charge more to handle.
Complexity extends to how much work the CPA needs to do to obtain receipts, accurately check earnings, and more. The NATP survey reported CPAs charge an average of $166 extra for disorganized or incomplete files and a $377 retainer to do tax prep for a prior year. Having surprise fees tacked to the cost of tax preparation is an unwelcome sight—that’s why proper bookkeeping is necessary!
Understanding the Average Cost of Tax Preparation by a CPA
Understanding the normal cost of tax arrangements by Certified Public Accountants (CPAs) entails assessing numerous elements. CPA tax preparation services usually charge based on the difficulty of the tax return, which may vary depending on variables such as earnings sources, deductions, and credits. The sort of tax return being filed — whether for a person, a company, or a nonprofit organization — may also affect the price.
The amount of knowledge and experience of the CPA may affect tax preparation rates since more experienced CPAs may expect greater fees. Ultimately, although the typical cost of taxation preparation varies based on these aspects, customers benefit from the experience and confidence that their taxes are appropriately handled and in line with tax rules.
Average Rate of Taxation Arrangement
Price Type | Tax Preparation Fees |
Average Fees | $250 |
Minimum Fees | $170 |
Maximum Fees | $454 |
Extensive Average Rate of Tax Preparation by CPA
Complexity of Your Tax Situation | Average Price Range (USD) |
Standard (Individual tax, Zero Deduction) | $100-$200 |
Balanced (Homeowner, Deduction) | $200-$400 |
Complex Tax (Investors, Rentals) | $300-$600 |
Highly Complex (Business Owner, Multi-State) | $500+ |
In conclusion, the higher complexity of the tax is directly related to the higher cost of tax preparation, especially when it comes to hiring a CPA for business tax preparation fees.
How Much Is The Tax Preparation Rate?
Tax preparation expenses could vary depending on the difficulty of your taxes and the type of service you select. For individual tax returns, such as a basic W-2, the expense might be very minimal. However, more intricate returns that combine investments, small firms, or multiple income streams may require a more in-depth review, which boosts the price. On average, most individuals may anticipate paying anywhere from $100 to $500 for personal tax planning and tax returns, but it’s crucial to acquire a quote tailored to your unique circumstances.
How Much Does A Tax Professional Charge Hourly?
If a tax preparer works with a tax expert for tax counsel for tax advice who charges by the hour, the costs of tax returns may range from $100 to $400 per hour, depending on their competency, type of tax situation, and the complexity of your specific tax return. For instance, a professional CPA may charge more than a common tax preparer due to their knowledge and certifications. The number of hours required will depend on your tax situation filing for a personal tax return needs less time than processing various income sources, investments, cost of living, or tax savings.
Ways To Reduce The Cost Of Tax Preparation Services
Tax season may be a stressful time, but there are methods to decrease the cost of tax preparation and keep your spending in control. Having clean, orderly books that are up-to-date at year-end is a terrific place to start. When you have your paperwork readily accessible and correct, it makes things much simpler for a tax preparer.
Depending on your kind of company, you may also be allowed to deduct your business taxation preparation costs on your individual tax return as part of your “ordinary and necessary” expenditures. Sole proprietors or independent contractors (Schedule C), landlords or royalty earners (Schedule E), and farmers (Schedule F) all fulfill the conditions for deducting business tax preparation expenses.
Does navigating all that seems like too intimidating of a chore on your own? Check out our CPA firm’s Year-End Financial bundle, which offers a CPA everything they need to submit in a compact and tidy bundle. It contains effective tax strategies, an income statement, a balance sheet, a trial balance, a journal entry summary, and a general ledger. Consider Bit Accounting as your golden ticket for a stress-free tax season.
Are You Ready For This Tax Season?
In conclusion, tax preparation can be hard and consume your precious time, too. Hiring a CPA firm like Bit Accounting saves you from this comprehensive tax process. We’re offering assistance with business and personal tax returns. Our tax advisors are people who are best in their field.
Check our average cost of tax preparation for LLCs or contact our experts to learn more about our tax preparation charges.
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