The Average Cost of Tax Preparation by CPA

The average cost of tax preparation depends on the complexity of your return. In most cases, basic tax filing is less expensive, while returns involving business income, rental income, itemized deductions, or business tax returns generally cost more due to time, risk, and complexity.

At C.E. Thorn, CPA, PLLC, our Raleigh CPAs are examining the primary factors that determine the average cost of tax preparation fees.

Factors That Impact the Cost of Tax Preparation

The cost of tax preparation isn’t random. Most tax preparation costs come down to one thing: how much work the return requires. That includes both technical work (forms, schedules, compliance) and practical work (sorting through messy records).

Tax preparation fees vary by:

Tax preparation services can include more than just completing forms. In many cases, a tax accountant may also help organize tax documents, review deductions, and identify filing issues that could trigger an IRS audit.

Complexity of Your Tax Situation

A basic tax return usually costs less than a return involving:

• Multiple income streams

• Business ownership

• Rental properties

• Capital gains transactions

• Itemized deductions

• Multiple income sources across states

Number of Forms and Schedules Required

Most preparers price based on each tax form. The more forms needed, the higher the tax preparation fees.

Disorganized or Incomplete Files

If receipts, 1099s, and bookkeeping aren’t clean, the tax preparer may have to spend extra time sorting them out. Those disorganized or incomplete files may incur additional fees.

Filing Urgency or Special Circumstances

Expect additional costs if you:

• Show up near the tax deadline

• Need an extension filed fast

• Need help responding to IRS notices

• Want assistance during an IRS audit

Typical CPA Pricing Models 

Not all tax preparers charge the same way. Understanding the fee structure helps you compare pricing fairly:

Per-Form Pricing

Each form has its own cost. This model is usually clearest for taxpayers with multiple income streams. It’s also easier to explain upfront so clients aren’t left guessing.

Flat Fee Tax Prep

A flat fee model gives predictability. It’s often used for:

• Reducing stress during tax season

• Personal tax returns with stable year-to-year activity

• Ongoing clients whose tax documents are consistent

Hourly Rate Billing

Some tax preparation rates are billed hourly, especially when:

• IRS audit support is requested

• Consulting with a tax advisor is involved

• Prior-year corrections are needed

• Records require cleanup

Hybrid (Flat Fee and Hourly)

This is common when a return starts out simple but then becomes more complicated during the process. A hybrid model may include an upfront flat fee and hourly billing for work outside the originally expected scope.

Average Cost of Tax Preparation by Tax Form

Tax Form	Average Cost per Form	Average Hourly Fees
Form 940 (Federal Unemployment)	$78	$111.95
Schedule C (Self-Employment)	$192	$149.95
Schedule E (Rental)	$145	$149.52
Schedule EIC	$65	$146.70
Form 1040 (Non-Itemized)	$220	$153.74
Form 1040 (Itemized)	$323	$161.34
Form 709 (Gift Tax)	$421	$178.29
Form 1041 (Fiduciary)	$576	$172.66
Form 1065 (Partnership)	$733	$177.29
Form 990 (Exempt Organization)	$735	$171.48
Form 1120-S (S Corporation)	$903	$179.81
Form 1120 (Corporation)	$913	$181.57
Form 706 (Estate)	$1,289	$188.63

For small businesses, corporate tax returns and S corp filings may cost more because they often involve additional schedules, reconciliation, and compliance review.

Average Flat Rate for Tax Prep Services

Nationally, the average flat rate for tax preparation often starts around $220 for a basic Form 1040 (standard deduction) and increases to about $323 for a Form 1040 with itemized deductions.

Average Cost of Tax Preparation for Small Businesses

Small businesses tend to pay more for tax preparation simply because business tax involves more compliance and more moving parts.

Small business owners may need:

• Schedule C (sole proprietors)

• Form 1065 (partnerships)

• Form 1120-S (S corps)

• Form 1120 (corporate tax returns)

In many cases, the cost of tax preparation for small businesses ranges $500–$1,500 depending on volume, bookkeeping quality, and entity type.

Why Business Tax Preparation Fees Run Higher

Business tax returns often require:

• Categorizing and validating expenses
• Reviewing business income accuracy
• Handling payroll reporting items
• Confirming state and federal obligations
• Checking for missed deductions
• Reducing exposure that could lead to an IRS audit

Can Tax Preparation Fees Be Deducted?

Personal tax preparation fees are generally not deductible for most taxpayers since the 2018 Tax Cuts and Jobs Act (TCJA).

However, portions of tax prep fees may be deductible if they relate to:

• Business tax filings
• Rental income reporting
• Trust tax preparation or fiduciary filing needs
• Other income-producing activity

Contact Our Raleigh Small Business CPAs Today

If you’re in the greater Raleigh, NC area looking for small business tax services, C.E. Thorn CPA PLLC may be able to help. We work with small businesses across a wide range of industries and can help you stay organized, prepared for tax season, and confident in your filings year after year.

To see if we’re a good fit for your accounting and tax preparation needs, call us today at  919-420-0092 or fill out the form below.