How Much Do You Pay your CPA for Tax Preparation?

Question

Hi Folks,

How much did YOU pay your CPA for tax preparation and filing 2016 taxes?

I just got my bill from my CPA for preparing my 2016 taxes - $4,200.   Feels steep to me.   I am filing in California and I bought one new property in 2016.  I have a portfolio of under 10 properties.

In their services performed, my CPA wrote: "Preparation of 2016 federal and state individual income tax returns, including organization and analysis of transactions.  Accounting for additional properties, set up of depreciation schedules and reconciliation between management company cash flow statements and cost workbook and maximizing deductions for expensing loan costs."

Am I getting ripped off?  Or is this the fair cost of having a good CPA?

Your input is much appreciated!

Paul Allen · Answer

There's tax preparation and then there's getting the books organized so that tax preparation is possible.  When preparing tax returns, my fee difference between landlords who bring me a spreadsheet and landlords who bring me a shoebox full of receipts is significant.

Account Closed · Answer

For 2024:

most people who own one business, have some small rentals, stocks, and a w2 or 1099 here and there, I would say anywhere from 700-2900 bucks. I've done quite a bit of market research when trying to standardize our pricing, and these are the market rates I've found. I don't think trying to save a few 100s on an accountant is the way to go either. In this industry, you really get what you pay for! Sadly most of the time people overpay because they are working with a top-tier CPA who is giving them all the bells and whistles when the client may not need all that. Or worse, they underpay and get an inexperienced accountant who then makes mistakes and makes problems for the next accountant who has to go back and amend those mistakes. Choosing the right accountant really is important!

Kory Reynolds · Answer

Agreed.

Some Baseline numbers to consider - Turbo Tax Business has a baseline price of $1,750 for a partnership or S-Corp.  Their personal tax prep is around $500 for a 1040 with some stock issues.  This is for just someone who puts the numbers in the boxes for you, most of them are seasonal, and you won't see them again - if you have an issue, someone else will deal with it in the future.

If a CPA/EA isn't charging substantially more than these amounts, they are likely short changing themselves given they are often providing substantially more in services, guidance, strategy, etc.

Natalie Kolodij · Answer

@Ori Skloot Is your CPA proving you guidance? Are they talking with you throughout the year? Did they save you twice what their bill was?

For just a filing- that is fairly steep. Many bigger firms bill per form basically or instance of. So They likely charge for Schedule E * How many rentals basically.

Like Brandon I don't bill that way either. It's kind of a traditional method- but you can see why it doesn't work. Price should be determined by the value they provide you...not how long it took them. Why does that really matter?

If I'm charging someone $4k you bet your butt I've saved them significantly more in taxes.

Brandon Hall · Answer

@Ori Skloot unfortunately, no one will be able to tell you whether you are paying too much because no one will openly disclose exactly what they had going on.

$4,200 seems high but I don't know what was included in the scope of work. If you had 10 properties, kept your books fairly organized, no entities, and a W2 job or no other income, most firms would be in the low $1,000s.

If you have a business and are doing relatively well, expect an additional $500-$2,000 depending on scope of work and how organized you are.

If you are using a partnership or S-Corp, you're looking at another $1,000-$2,000.

My firm doesn't bill like this anymore so numbers may not be 100% accurate.

Account Closed · Answer

100%. If you are going to pay turbo tax rates, you will get turbo tax quality and potentially miss out on planning and strategy which is where the real value of a tax pro comes in IMHO

Tamarra Barnes · Answer

Hello, are you still using the same CPA? If so, do you mind sharing the contact information? I am looking for a new CPA and tax preparer.

Ori Skloot · Answer

@Caleb Heimsoth @Dustin Heiner   Holy smokes!  Now I feel like I'm getting ripped off. ;).  Thanks for the feedback, I'm definitely going to shop around for 2018 (already have done too much work with my accountant for 2017).   Dustin I'll ping you...thanks.

How Much Do You Pay your CPA for Tax Preparation?

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