Asking a CPA "how much will this cost?" often produces a frustrating non-answer: somewhere between $500 and $5,000, depending on your situation. That range is technically accurate but practically useless when you need to budget for the expense or evaluate whether a quote is reasonable.
The variables that determine your actual cost follow predictable patterns. This guide helps you understand what drives CPA costs and gives you a framework for estimating your own.
Estimate Your Tax Prep Costs: Quick Calculator Worksheet
Use this step-by-step worksheet to estimate your annual CPA fees. Start with your base cost, then add adjustments for your specific situation.
Step 1: Find Your Base Cost (by Entity Type and Revenue)
Your entity type determines baseline pricing. S-Corps require 1120-S plus payroll returns (Forms 940 and 941), which explains why they cost more than simpler structures. If you're considering an S-Corp election for tax savings, factor this compliance cost into your calculation.
If your revenue is under $750K:
Entity Type | Base Fee Range |
Sole Proprietor (Schedule C) | $450 - $1,200 |
Single-Member LLC | $550 - $1,350 |
Partnership/Multi-Member LLC | $900 - $2,400 |
S-Corporation | $1,200 - $3,400 |
C-Corporation | $1,500 - $4,200 |
If your revenue is $750K - $2M:
Entity Type | Base Fee Range |
Sole Proprietor | $1,100 - $1,500 |
Single-Member LLC | $1,250 - $1,700 |
Partnership/Multi-Member LLC | $2,200 - $3,200 |
S-Corporation | $3,000 - $4,500 |
C-Corporation | $3,700 - $5,600 |
Your base range: $_______ to $_______
Step 2: Add for Multi-State Operations
Operating across state lines increases costs because each state requires separate tax returns with different nexus rules (which determine when you must file taxes in a state) and filing deadlines.
1 state: Add $0
2-3 states: Add $500 - $1,000
4+ states: Add $1,000 - $2,000+
Multi-state adjustment: + $_______
Step 3: Add for Contractor Volume
For businesses relying heavily on 1099 contractors, additional costs come from classification verification, payment tracking, and year-end 1099-NEC preparation.
0-5 contractors: Add $0
6-15 contractors: Add $250 - $500
16-30 contractors: Add $500 - $1,000
30+ contractors: Add $1,000+
Contractor adjustment: + $_______
Step 4: Apply Bookkeeping Quality Multiplier
Clean, organized monthly books get baseline pricing. What CPAs call "shoebox accounting," where receipts pile up without categorization, may double your fees or lead some firms to decline the engagement entirely. Investing $300 to $800 monthly in bookkeeping services often costs less than the tax-season cleanup penalty.
Clean monthly books (reconciled, categorized, ready for CPA): Multiply by 1.0x (no change)
Needs some work (mostly organized, some catch-up needed): Multiply by 1.3x - 1.4x
Disorganized/"shoebox" (receipts piled up, minimal categorization): Multiply by 1.5x - 2.0x
Your multiplier: ___x
Step 5: Calculate Your Estimate
Step | Low Estimate | High Estimate |
Base cost (Step 1) | $_______ | $_______ |
+ Multi-state (Step 2) | $_______ | $_______ |
+ Contractors (Step 3) | $_______ | $_______ |
Subtotal | $_______ | $_______ |
× Bookkeeping multiplier (Step 4) | ___x | ___x |
Your Estimated Annual CPA Fee | $_______ | $_______ |
Example calculation:
S-Corp with $400K revenue: Base $1,200 - $3,400
Operating in 2 states: +$500 - $1,000
12 contractors: +$250 - $500
Books need some work: ×1.35
Estimated range: $2,633 - $6,615
This worksheet provides directional estimates based on industry benchmarks. Get quotes from 2-3 CPAs to confirm pricing for your specific situation.
Industry-Specific Tax Prep Costs
Revenue alone doesn't determine costs, and different industries face different complexity levels that directly affect what CPAs charge.
A $500K consulting firm and dental practice generate similar revenue, but the dental practice typically faces significantly higher CPA bills due to partnership complexity, equipment depreciation, and specialized retirement plans. Service businesses without inventory pay less than retail operations managing shrinkage accounting. E-commerce sellers face multi-state sales tax compliance that consultants never encounter. Understanding these patterns helps you benchmark against similar businesses rather than simply comparing revenue levels.
The following ranges represent compiled estimates based on industry complexity patterns. These are not survey data, and your actual costs may differ based on your specific situation, location, and CPA firm.
Consulting and Agencies: $1,500 - $3,000
Service businesses without inventory typically pay the least for CPA services. The absence of cost of goods sold calculations, minimal equipment depreciation, and straightforward revenue recognition keep complexity low. What affects costs most is independent contractor usage: managing 5 or more subcontractors may increase base fees by an estimated 25-40%.
Home Services and Trades: $2,000 - $4,000
Plumbers, electricians, HVAC contractors, and landscapers face moderate complexity. Costs increase because of 1099 management, job costing by project, vehicle depreciation for truck fleets, and documenting personal versus business use of equipment.
E-Commerce: $1,500 - $6,000+
Online sellers encounter high complexity despite having no physical locations. Multi-channel reconciliation across Amazon, Shopify, and other platforms creates work. Inventory tracking across warehouses, fulfillment centers, and third-party logistics adds layers. Multi-state sales tax compliance, triggered by economic nexus rules from the South Dakota v. Wayfair decision (which established that online sellers must collect sales tax in states where they have significant sales, even without physical presence), requires filings in 10 to 20+ states.
Retail (Physical Stores): $2,500 - $5,000
Brick-and-mortar retail adds inventory valuation methods, shrinkage accounting, and location-specific reporting. Each additional store location may raise annual CPA costs by an estimated $800 to $1,500.
Professional Services Practices: $3,000 - $6,000+
Medical, dental, and legal practices face the highest complexity in their revenue range. These professional service practices require specialized retirement plan reporting and face additional complexity from partnership structures: each additional partner may raise annual CPA costs by roughly $300 to $500 for K-1 preparation.
How to Evaluate CPA Quotes
Getting multiple quotes matters less than understanding what you're comparing. A Business Insider case study documented quotes ranging from $280 to $1,120 for the same single-member LLC in one California market, nearly a 4x spread for comparable service.
What to Ask Before Signing
Before engaging any CPA, get clear answers to these questions in writing:
Billing structure: Flat fees provide cost certainty, while hourly billing typically ranges from $150 to $400 per hour. Ask for a detailed written fee agreement specifying what's included, what costs extra, and how scope changes are handled.
Additional fees: Ask specifically which services require extra charges. Multi-state filings (often $500-$1,500 per additional state), amended returns, sales tax returns, and audit representation frequently fall outside base quotes. Understanding these boundaries prevents surprise bills in March.
Handling complexity: Clarify how they handle unexpected complexity. Ask specifically how they structure flat-fee arrangements and what happens if your situation becomes more complicated than initially scoped. The answer reveals whether you're working with someone who builds in a reasonable buffer or someone who nickel-and-dimes every deviation.
What Should Raise Concerns
Problematic billing practices include invoices lacking detail about work performed, charges for every brief phone call or email, and unexplained surcharges. Service quality concerns include CPAs who only file returns without proactively helping you identify tax-saving opportunities.
Fees running 50% or more below market benchmarks signal quality risks: rushed preparation, potential missed deductions, or limited service scope that creates expensive problems later.
When Professional Tax Prep Pays Off
DIY tax software typically costs approximately $150–$280 annually for federal returns, plus roughly $50 per state. But the decision between DIY and professional help depends heavily on your revenue and complexity.
Under $50K revenue: For very small businesses with simple sole proprietorships, single-state operations, and no employees, DIY works. The cost savings outweigh the benefits of professional preparation at this scale.
$100K to $500K revenue: CPA services often become economically justified. Missed deductions may exceed the fee differential, and S-Corp or LLC structures push strongly toward professional help regardless of owner tax knowledge.
Above $500K revenue: Professional services typically provide strategic value beyond compliance. According to U.S. Treasury projections, businesses invest an average of 61 hours annually on tax preparation. At that revenue level, the opportunity cost of DIY often exceeds CPA fees before considering error risk or missed planning opportunities.
Building Tax Prep Into Your Budget
Tax preparation isn't a once-a-year expense that appears without warning. The NATP Fee Study found that 83% of tax preparers raise fees every one to two years, with increases of 6-10%. When planning beyond the current year, budgeting for 6-10% annual fee growth provides a reasonable estimate.
Setting aside money monthly for tax prep, alongside quarterly estimated payments and other tax obligations, prevents the scramble that comes from treating these costs as surprises.
Reduce Your CPA Costs With Better Financial Organization
Disorganized records force CPAs to spend billable hours sorting transactions instead of preparing returns. When your CPA has to reconcile a single bank account containing thousands of mixed personal and business transactions, that time shows up on your invoice.
One way to reduce that cleanup time: separate your money by purpose throughout the year. Dedicated accounts for quarterly estimated payments, CPA fees, and payroll taxes mean cleaner statements and faster reconciliation. Your CPA receives organized records instead of a puzzle to solve.
Relay makes this separation simple. You can create multiple checking accounts, each labeled by purpose and visible in one dashboard. When tax season arrives, you export clean, categorized statements rather than asking your CPA to untangle mixed transactions. Open a Relay account1 to see how it works.
1Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
