Overview: CPA Fees | How Much a CPA Costs (Prices, Rates Per Hour, Fee Schedule)
Taking care of your personal and business accounting needs is a serious matter. This is why most individuals prefer to entrust their finances to a certified public accountant (CPA).
However, while many consumers and businesses could benefit from the services of a CPA, many are scared off by the potential cost of a CPA.
At AdvisoryHQ, we’ve noticed a heightened interest regarding CPA fees and the average CPA hourly rate. To help our readers better understand the cost, we’ve put together this review to address key questions consumers are asking:
- How much does a CPA cost?
- How much does a CPA charge per hour?
- How much does a CPA charge to do taxes?
Image Source: CPA Fees
The CPA fees associated with the services provided are of great interest to both individuals interested in hiring a CPA and to professionals who work in the industry. To help aspiring CPAs understand what their services are worth, we will review examples of a typical CPA cost and a CPA fee schedule to help your business pricing align with the market.
No matter why you might be interested in the cost of a CPA, our review will give you the information you need to know to avoid being overcharged.
How Much Does a CPA Cost?
This question is the most pressing one on everyone’s mind: how much does a CPA cost? Unfortunately, this question cannot be answered simply.
The cost of a CPA depends largely on the CPA fee schedule, which each individual certified public accountant will determine for themselves. In our review, we are going to take a closer look at the two primary payment methods used by CPAs to determine exactly how much a CPA costs.
Most commonly, CPA fees are determined on an hourly basis. Surveys conducted by Intuit (the company behind the popular accounting software, Quickbooks) concluded that 66 percent of accounting professionals bill by the hour.
While other types of accounting professionals were also included in their survey (tax accountants, CMAs, certified ProAdvisors, and bookkeepers), 26 percent of respondents were labeled as CPAs.
Keep in mind that the CPA rates per hour can vary pretty drastically from region to region. How much do CPAs charge in specific areas? Areas with higher costs of living, such as New York or California, may see a higher CPA cost per hour than those in the Midwest or Southeast.
Additionally, the average CPA hourly rate may fluctuate depending on the level of experience and training that a certified public accountant has.
By definition, a licensed CPA already has more education than some other accountants do, with a minimum of a bachelor’s degree and a passing grade on the CPA exam. They must also maintain continuing education credit to keep their license current.
How much does a CPA cost? The number will be differ depending on a number of factors, but in the upcoming section, we will take a look at CPA rates per hour and examples of a possible CPA fee schedule.
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How Much Does a CPA Charge Per Hour?
How much do CPAs charge? Now that you understand exactly which factors can influence the CPA rates per hour, it’s time to take a more in-depth look at how much CPAs charge their clients around the United States.
Plan on spending anywhere from $30 to $300 per hour. Trying to figure out what the difference is between the services you receive for $30 per hour versus the $300 CPA fees? Let’s look at the breakdown of CPA rates per hour.
Image Source: Payscale
The national hourly rate data provided for the average CPA hourly rate comes in just slightly under $30 per hour ($29.61).
Because of the additional education and certification that a CPA holds, they are able to command a higher rate than a general accountant, whose median hourly rate is only $22.10 (to compare additional accounting professionals’ salaries to that of a certified public accountant, take a look at the chart above).
Consumers will typically hire certified public accountants because they value the additional education and insight that the CPA title is supposed to lend to professionals. This education and experience can command a higher price than a standard accountant without their license.
How much more do CPAs charge for their experience? Within each firm, there are separate CPA rates per hour in place depending on the overall income of the firm as well as the number of employees.
CPA juniors and seniors find their average CPA hourly rate falling somewhere between $100 and $150 per hour. Seniors tend to make on average approximately $10 to $20 more per hour than their junior counterparts do.
How much does a CPA cost when they’re the owner of the firm? It’s a pretty hefty price difference.
An owner’s CPA cost per hour can range from $172 for firms that gross less than $1 million each year to $300 per hour for firms that gross more than $20 million each year. CPA owners can also make significaFntly more than non-CPA owners with a $20 to $100 per hour price difference between the two (for more comparisons, see the chart below).
As you can see from the above examples, the CPA rates per hour vary depending on seniority within the company as well as the size of the firm itself. Smaller firms with lower gross earnings each year may charge an average CPA hourly rate between $30 and $50 per hour, depending on the tasks for which you hired them.
Image Source: GSCPA
CPA Tax Preparation Fees
One of the biggest tasks for which consumers and businesses alike will seek out a certified public accountant is tax preparation. As the fiscal year comes to a close, many individuals find themselves wondering, “How much does a CPA charge to do taxes?”
This is a legitimate concern, right along with the CPA cost per hour. In our review here at AdvisoryHQ, we’re going to break down what you can expect to pay next tax season in CPA tax preparation fees.
Your CPA fees will depend on the level of complexity involved in your unique tax situation. The National Society of Accountants reported the following average CPA tax preparation fees from the previous year:
- Form 1040 with state return and no itemized deductions – $176
- Form 1040 with state return and Schedule A – $273
- Form 1040 with state return, Schedule A, and Schedule C – $457
Alternatively, you can opt to have your taxes filed by one of the larger, well-known companies that advertise around tax season for approximately $150-$260.
Keep in mind that professionals hired by companies such as H&R Block or Liberty Tax Service are not always licensed CPAs and may not have extensive accounting backgrounds. While the CPA fee schedule has the potential to cost more than one of these options, you may find that you save more on your taxes by entrusting them to a certified public accountant.
How much does a CPA charge to do taxes if you have a situation that is slightly out of the norm? You might be surprised at how affordable it can be to hire a professional to prepare your taxes this year.
The IRS assembled some of the numbers from the National Society of Accountants to give you a better idea of what you could be looking at in CPA fees.
What other CPA fees might you incur when it comes time to prepare your taxes? Take a look at this average CPA fee schedule from CBS News featuring common occurrences that cost consumers extra come tax time.
- Disorganized or incomplete information – $114
- Providing information later than requested – $93
- Expediting a return – $88
- Filing for an extension – $42
The cost of a CPA preparing your taxes can differ not only based on the experience, location, and size of the firm you hire, but it can also differ based on the situation you find yourself in. If you’ve been wondering how much a CPA is for when tax season rolls around, this should give you a good overall picture.
How Much Do CPAs Charge When Work Is Not Billed Hourly?
Now that you’re armed with information regarding how much CPAs charge per hour, it’s time to take a look at instances where CPA fees may not be billed hourly.
As with accountants who specialize in routine monthly services such as bookkeeping or payroll, certified public accountants may encounter routine situations which make more sense to bill based on a fixed-fee or a flat-rate system.
Certainly, some certified public accountants can also manage the daily influx of activity with your personal or business finances. How much does a CPA cost above another accountant?
You should be paying slightly more than you would to an unlicensed accountant, but you could expect to pay a fixed-fee for payroll, making deposits, managing your accounting software, or handling your state sales tax.
Services that are rendered regularly on an ongoing basis are typically billed this way to avoid surprises each month for the clients and to provide stability since the firm will know exactly how much CPAs charge for certain items.
How should you evaluate what these fixed-fee services should cost? Well, you first need to ask how much does a CPA charge per hour?
Based on the section above, you should have a good idea of what the average CPA fees should be based on the firm, location, and experience of your CPA. Inquire approximately how many hours they believe the work you enlist them for should take and see if the number is reasonable.
How much does a CPA cost for tax preparation? This is another scenario where most CPA fees will come in the form of a flat rate for each individual filing.
While you may still find CPAs who will charge an hourly fee, many will charge set rates for specific income and tax situations based on the IRS guidelines for estimated times to complete each form.
How much do CPAs charge to do taxes? Our detailed review of what you can expect to pay in CPA fees covers this exact scenario in the upcoming section.
Conclusion: How Much Is a CPA?
While determining CPA fees for each individual scenario isn’t an exact science, we can come up with rough approximations for the average CPA rates per hour. This can be a difficult situation to process because CPA fees do vary depending on your location, the firm you select, and the task you hire them for.
However, our average cost of a CPA should give you a starting point when it comes to answering the question, “How much does a CPA cost?”
CPA tax preparation fees are even more difficult to delve into because of the complexity of each unique situations and filing need. For the most basic situations, the average CPA fee schedule listed above should give you a good grip on whether your new CPA is charging fair CPA rates per hour.
Don’t forget that while our average CPA hourly rate review can provide an excellent introduction into understanding how much a CPA is, in order to get the most realistic estimate for your financial situation, you should contact a local CPA directly for their CPA fees.
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