Nobody likes to pay taxes. So having to pay high prices to do your taxes can seem like an insult to injury. But preparing your taxes yourself can be dangerous. Simple mistakes and deductions can cost you thousands of dollars in overpaid taxes or fines and penalties. For this reason many small business owners hire a Certified Public Accountant (CPA) to handle their taxes and provide tax, accounting, and business advice. But how much does a CPA cost? In this article below, we will discuss how much does a CPA charge to do taxes.
Related How Much Does a CPA Charge to Do Taxes?:
How much does it cost to file taxes?
The cost of hiring a CPA depends on several factors. Including the forms that are filed, their level of experience, and the state in which they are filed. Some CPAs bill by the hour, by form, or by the service provided. When looking at just the cost of filing taxes, you usually don’t break the bank. And hiring an accountant to prepare and file your business taxes can count as a business expense and therefore count toward your tax deductions. Actual fees may depend on your location. The CPA’s level of experience, the complexity of your financial situation, and the level of service you require.
Tax preparation costs:
According to the National Society of Accountants (NSA) in its 2020-2021 survey report. The average CPA hourly rate for filing federal/state tax returns was $180 and $174 for other tax services. Of course the number of hours a CPA charges depends on the service. And is affected by how organized your files are the fees charged by accountants vary. Some CPAs may charge a flat fee for service.
Why it pays to hire a tax professional
Filing your taxes yourself can save you money. But it can also be stressful and time-consuming, and your time and peace of mind are valuable! Self-employment taxes aren’t as simple as filing taxes as an employee because you don’t have an employer to file and deposit employment taxes for you. Because you’re self-employed you’ll need to set aside time to prepare everything yourself, including filling out the correct tax forms, showing income, submitting your expenses, and more. Sometimes it pays to hire a professional, knowing that they have everything under control and will prepare and file your taxes without errors.
Average rates for additional standard rates:
- $166 for disorganized or incomplete files (78 percent of typical companies charge extra for this)
- $56 for file extensions (58 percent of average companies do not charge for this service)
- Withholding of $377 for tax preparation in the non-current year
- $902 withholding for IRS audits
- $136 to expedite returns (68 percent of typical businesses do not charge for this service)
There are several other benefits of working with a CPA:
- Accountants use professional software to prepare your tax return, error-free, and retain your information (with your consent) to speed up the preparation and filing of your taxes in later years.
- Given their professional experience and knowledge of the tax code, CPAs often find ways to lower your taxes.
- CPAs will generally pay interest or penalties for accounting errors.
- You can ask your accountant any tax-related questions along the way and get information
- With access to your finances, a CPA is likely to be able to identify financial problems and provide advice.
How much does a CPA charge for filing business taxes?
Filing your own taxes is rarely a good idea in the business world. There are so many variables involved, schedules and forms to fill out, deductions to consider, it’s overwhelming.
You can find a CPA, or certified public accountant, to specifically handle your business taxes and let them take care of the stress for you. You’ll want to take the time to see what your options are and make sure you find an accountant who is licensed to work in your state of incorporation or business operation. They should be familiar with local and federal tax laws, as well as how to make sure your business gets the maximum deductions to minimize the amount you pay to the IRS each year. There is no one-time cost for a CPA to prepare and file business taxes. There are too many variables involved.
One consideration that will affect how much you pay for taxes with a CPA is the size of your business. Or more importantly the size of your profits, assets, and other business assets. The larger the company, the more complex its taxes will become over the years. So while a small business may only spend a few hundred dollars on tax preparation at first that amount could add up to $1,000 or more.
Forms and schedules
Some CPAs will also charge their fees based on the forms and/or attachments they are required to complete. This is because it will generally determine the amount of labor involved and the time it will take to do the job. It may also mean that they have more work to do with paperwork, providing documentation, etc.
Another way that CPAs charge for their services is based on an hourly rate. This is most common for complex business taxes, and the average tracking rate is approximately $180 per hour for tax services or filing of federal and/or state tax returns. Some CPAs may have flat rates for taxes. But hourly billing is common, so it’s important to know what the two entail so you can find the right one for the job. Some CPAs may also charge hourly rates for anything beyond their “standard” tax service.
Some CPAs will also have additional fees that come with their tax filing services. Such as IRS audit assistance withholding, prior year tax preparation withholding, extension filing fees, etc. There are also higher costs if you want to speed up your returns and you may be charged an additional fee if your files are incomplete or disorganized. After all, the more work they have to do to complete their taxes the more time and effort it will take.
Before you go, I hope that the above article related to how much does a CPA charges to do taxes will be helpful and informational for you.