How Much Does A CPA Cost?

Last Updated on December 27, 2023
Written by CPA Alec Pow | Content Reviewed by CFA Alexander Popinker

CPAs, or Certified Public Accountants, deliver essential financial services including auditing, tax preparation services, bookkeeping, and advising on business transactions. Their expertise assists companies in complying with accounting regulations and optimizing finances. While hiring a CPA provides invaluable skills, it also carries costs.

This article will explore the typical hourly rates CPAs charge, standard project costs, factors influencing fees, strategies for controlling expenses, and considerations around utilizing CPAs.

Rates range based on location, firm size, expertise level, and service complexity. Though exact rates vary, general ranges apply for common small business needs. Thoughtful planning balances the significant benefits of CPAs with their associated costs.

The cost of a CPA usually ranges from $150 to $500 per hour depending on factors like experience level, firm size, and geographic location. Partners at large metro firms often bill over $500/hour, while junior staff at smaller local firms charge $100-$150/hour.

Project fees for common CPA services include tax return preparation ($300-$3,000+), audits ($5,000-$75,000+), financial statement preparation ($2,000-$10,000), bookkeeping ($150-$300/month), and consulting ($250-$500/hour).

New client onboarding like choosing a business entity structure and filing formations runs $1,500-$4,000. Larger undertakings like mergers and acquisitions or litigation support involve even higher fees at partner billing rates. While costs vary, these figures represent general ranges that small businesses can expect when using CPA services based on needs.

CPA Hourly Rates

CPAs typically bill between $150 and $500 per hour depending on:

Experience level – Partners charge up to $500+ per hour, managers $200-$300, seniors $150-$225, new staff $100-$150
Location – Major metro areas have higher rates
Firm size – Big national/regional firms charge more than local boutiques
Specialized services – Premium rates for niche expertise like mergers & acquisitions
Client size – More records and complexity increase the time required

CPA fees often have half-hour minimum increments. Many require retainers prior to starting the work.

Typical CPA Project Costs

While CPAs usually charge hourly, typical fees for common projects include:

Tax return preparation – $300-$3000+, based on complexity
Financial statement preparation – $2000-$10,000
Monthly bookkeeping services – $150-$300
Consulting – $250-$500 per hour
Audits – $5000-$75,000+, depending on client size

New business formation assistance like choosing entity structure, projections, and filings may cost $1,500-$4,000. Nonprofit application services could range from $2,000-$5,000+.

Forbes reports that the average hourly rate for accountants is $37, but rates can range from below $37 to more than $400 per hour. The article goes further, saying that the costs vary based on the accountant’s education, certifications, and the type of accounting services required.

According to Lendio, the average cost of hiring a CPA for tax services was $174 per hour in 2020 and 2021. The same website points out that average hourly costs for different CPA services in 2021-2022 were as follows:

Full Payroll Management: $100
Quickbooks or Bookkeeping Advisory: $109
Management Advisory: $158
Financial Statement Audits: $164
Estate or Financial Planning Services: $170
Federal and State Tax Return Prep: $180

SmartAsset stated that small business owners should expect to pay between $1,000 and $1,500 on average to have a CPA firm prepare both their individual and business tax returns.

Lili is another website reporting on CPA fees. According to them, the average hourly rate for filing federal/state tax returns is $180, and $174 for other tax services.

The average cost for specific services includes $166 for disorganized or incomplete files, a $377 retainer for tax prep in the non-current year, and $902 for a corporation’s Form 1120.

Investopedia says that the average cost for a tax professional to complete taxes ranges from $176 to $270, based on the complexity of the financial situation.

The average fee for an itemized Form 1040 and a state tax return is $323, and for an itemized Form 1040 with a Schedule C and a state tax return form, the average fee increases to $457.

Factors Influencing the cost to hire a CPA

Several important factors impact CPA pricing, including:

The location where services are delivered, as fees tend to run higher in major metro areas compared to rural regions.
The size of the firm, as large national and regional firms typically charge more than local boutique practices.
The level of experience the specific CPA has, with partners who have 20+ years of expertise billing up to $500 per hour compared to rates around $100-150 for new junior staff members.
Whether the project involves specialized, niche expertise like international taxation, mergers, and acquisitions, or litigation support results in premium billing rates.
The size and complexity of the client based on how many records, transactions, and overall activities the CPA must assess directly increases the time and effort required.
The type of service being provided also influences costs, with audits, mergers and acquisitions, business valuation, and litigation support commanding much higher engagement fees compared to basic bookkeeping or tax preparation. A
Accelerated turnaround times or rush jobs ordered under tight deadlines necessitate premium rates to complete quickly.

Strategies for Controlling CPA Costs

Tactics to help reduce CPA expenses include:

A good idea would be to compare rates across multiple local firms before selecting a provider, as prices can vary widely based on experience, overheads, and billing models.

You might also like our articles about the cost of a forensic accountant, family lawyer, or setting up an LLC.

You should also explore whether published “startup” discounts apply as a new business opening its doors.

Organizing accounting records, documents, and financial statements in detail is also a good idea, so CPAs need less time for cleanup work and context-setting.

Identifying tasks that can be reasonably handled in-house versus outsourcing specialized aspects to CPAs to avoid unnecessary billings is another thing you can do to spend less on CPA services.

Learn about tax deductions, requirements, and planning opportunities specific to your business structure and activities to avoid overpaying taxes.

Negotiate clear project pricing and caps upfront for large initiatives rather than leaving fully open-ended hourly engagements.

Final words

In summary, CPA rates range from $150 to $500+ per hour depending primarily on expertise level, firm size, and metro region. Project fees span hundreds of dollars for basic services to tens of thousands for major undertakings like audits.

Carefully planning engagements, leveraging cost reduction techniques, and allocating projects based on value derived optimizes a business’ return on investment in CPA expertise and prevents it from having issues with the IRS.

How Much Does a CPA Cost? – Certified Public Accountant Prices