How Much Does it Cost to File Taxes?
The average cost of tax preparation fees depends on what has to be reported on the specific return. For instance, an individual filing a straightforward tax return will usually save money compared to someone whose return includes business income, rental activity, and several itemized deductions.
At C.E. Thorn, CPA, PLLC, we provide professional tax preparation services for clients in the Greater Raleigh area. A goal of many of our clients is to find significant tax savings while remaining compliant with state and federal obligations.
Whether you are exploring tax preparer rates for complex personal tax returns or small business tax returns, we'll help you understand the average cost of tax preparation for individual and business taxes, answer "how much does it cost to file taxes," and provide a tax preparation price list.
Table of Contents
Average Cost of Tax Preparation for Individual & Business Taxes
The average cost for 1040 preparation is usually less than a return with added schedules or more involved records. A return that looks simple at first can become more involved once the supporting records are reviewed, especially if it includes several income streams and multiple deductions. Your return can cost anywhere from $65 to over $1,000, depending on several variables.
These factors contribute to the varied costs of tax planning services.
Complexity of The Tax Return
The complexity of your tax return can affect the average cost of tax preparation. For example, a W2 is usually less complex and thus quicker to file than a Schedule C.
A return with only W-2 income is usually easier to prepare than one involving multiple income streams, multiple income sources, or complex tax situations.
Fees often rise when a return includes:
- Business ownership
- Self-employment income
- Rental income
- Capital gains
- Itemized business expense deductions
- Multi-state filing issues
- Investment income
- Trust or fiduciary reporting
A taxpayer with a straightforward filing history may only need basic tax preparation. A taxpayer with a side business, investment sales, and a rental home may need a much more detailed review.
Number of Forms and Schedules Required
The number of tax forms you need to file also influences the total cost—the more forms, the higher the cost (usually).
A filing may begin with Form 1040 but also include Schedule C, Schedule E, Form 940, partnership returns, corporate forms, or trust reporting. As the number of schedules grows, so does the time needed to prepare and review the return, which can increase tax preparation pricing.
Organization of Tax-Related Documents
Complete and organized financial records may reduce your tax preparation costs.
When tax documents are incomplete, disorganized, or missing key details, a preparer may need additional time to sort through the file. That may lead to additional costs, especially if bookkeeping needs to be addressed before the return can be finalized.
This is often where small business owners run into higher business tax preparation fees. If financial statements are not clearly categorized, the return may require more reconstruction, more questions, and more review before filing.
Timing and Urgency
Bringing your return to a CPA near the deadline tends to yield a higher cost of tax return.
A return brought in near the tax deadline may require extra attention, especially if there are corrections to make, documents still missing, or an IRS notice that needs to be addressed. In many instances, this increases the total cost of services.
Common Pricing Models for Tax Preparation Services
People comparing a tax preparation price list often assume every office bills the same way. However, while many methods are similar, each individual tax advisor may bill for their services based on the combination of different models.
Flat Fee
A flat fee is often used when the scope of work is fairly clear at the start. This can be useful for basic tax filing, recurring client work, or returns that are similar from year to year. Some taxpayers prefer this model because it gives them a more predictable tax filing cost upfront.
Per-Form Pricing
Some firms charge a flat fee to start, then bill hourly if the work turns out to be more involved than expected. That can happen when a return looks fairly simple at first but becomes more time-consuming once the records are reviewed.
Hourly Rate
An hourly rate may be appropriate when the work is less predictable. This can happen when a client needs prior-year corrections, record cleanup, IRS audit support, or more detailed tax advice. In these cases, the final fee often depends on how much time is generally required to resolve the issues in the file.
Hybrid Pricing
Sometimes the price starts with a flat fee, but extra work is billed separately if the return becomes more involved once the records are reviewed.
How Much Does it Cost to File Taxes?
We often get asked, "How much does it cost to file taxes?" The answer depends on the type of tax form you need completed. The average cost of tax preparation for individual returns (1040s) usually averages over $200 when completed by a CPA. For those looking to save money with a straightforward 1040 tax return, you can file online for usually less than $50.
| 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 |
5 Factors That Increase the Cost of Tax Preparation
FAQs
How much does it cost to file taxes for my Raleigh small business?
Small business tax preparation costs in Raleigh can vary based on the type of entity, the condition of the books, and how much activity needs to be reported. A sole proprietor with a straightforward Schedule C will usually pay less than a partnership, S corporation, or corporation with more forms and record review involved.
Do tax preparers charge more for small business returns?
Often, yes. Small business tax preparation usually involves more forms, more review, and more documentation than basic personal returns. That is why business tax preparation fees are commonly higher.
Can tax preparation fees be deducted?
Usually, personal tax preparation fees are not deductible for most individuals. In some cases, part of the fee may be deductible if it relates to business tax returns, Schedule C, Schedule E, or certain trust or fiduciary filings. Because the tax treatment depends on the work involved, it is best not to speak to a tax professional to learn more about what tax prep fees are deductible.
Is tax software cheaper than professional tax preparation?
Often, yes, at least upfront. But tax software may not be enough for every filing situation. Taxpayers with business ownership, rental income, or more complicated reporting questions may benefit from working with tax professionals who can review the bigger picture.
Work With a Raleigh Tax Preparer for Small Business Filing Needs
If you are looking for a tax preparer near Raleigh and want a clearer understanding of tax preparation rates, C.E. Thorn, CPA, PLLC may be able to help. We work with individuals and small businesses who want practical guidance around tax filing, cleaner records, and a filing process that is easier to manage from year to year.
To see if we are a good fit for your small business accounting needs, call 919-420-0092 or fill out the form below.
Contact Form
Feel free to call our office or to complete the contact form below:
"*" indicates required fields