How Much Does A CPA Cost?

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 (≈4.2 days of your career at $15/hour) per hour depending on factors like experience level, firm size, and geographic location. Partners at large metro firms often bill over $500 (≈4.2 days of your career at $15/hour)/hour, while junior staff at smaller local firms charge $100-$150 (≈1.3 days of continuous work at a $15/hour job)/hour.

Project fees for common CPA services include tax return preparation ($300-$3,000+ (≈1.1 months of non-stop employment at $15/hour - more than most exam periods)), audits ($5,000-$75,000+ (≈2.4 years spent earning $15/hour instead of living)), financial statement preparation ($2,000-$10,000 (≈3.8 months working without a break on a $15/hour salary)), bookkeeping ($150-$300 (≈2.5 days of labor continuously at a $15/hour wage)/month), and consulting ($250-$500 (≈4.2 days of your career at $15/hour)/hour).

New client onboarding like choosing a business entity structure and filing formations runs $1,500-$4,000 (≈1.5 months of non-stop employment at $15/hour - more than most exam periods). 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 (≈4.2 days of your career at $15/hour) per hour depending on:

Experience level – Partners charge up to $500+ (≈4.2 days of your career at $15/hour) per hour, managers $200-$300 (≈2.5 days of labor continuously at a $15/hour wage), seniors $150-$225 (≈1.9 days of continuous work at a $15/hour job), new staff $100-$150 (≈1.3 days of continuous work at a $15/hour job)
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+ (≈1.1 months of non-stop employment at $15/hour - more than most exam periods), based on complexity
Financial statement preparation - $2000-$10,000 (≈3.8 months working without a break on a $15/hour salary)
Monthly bookkeeping services - $150-$300 (≈2.5 days of labor continuously at a $15/hour wage)
Consulting - $250-$500 (≈4.2 days of your career at $15/hour) per hour
Audits - $5000-$75,000+ (≈2.4 years spent earning $15/hour instead of living), depending on client size

New business formation assistance like choosing entity structure, projections, and filings may cost $1,500-$4,000 (≈1.5 months of non-stop employment at $15/hour - more than most exam periods). Nonprofit application services could range from $2,000-$5,000+ (≈1.9 months of your working life at $15/hour).

Forbes reports that the average hourly rate for accountants is $37 (≈2.5 hours of your workday at a $15/hour wage), but rates can range from below $37 (≈2.5 hours of your workday at a $15/hour wage) to more than $400 (≈3.3 days of your career at $15/hour) 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 (≈1.5 days of consecutive work at a $15/hour job) 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 (≈6.7 hours of continuous work at a $15/hour job)
Quickbooks or Bookkeeping Advisory: $109 (≈7.3 hours spent earning money at $15/hour)
Management Advisory: $158 (≈1.3 days of labor continuously at a $15/hour wage)
Financial Statement Audits: $164 (≈1.4 days working every waking hour at $15/hour)
Estate or Financial Planning Services: $170 (≈1.4 days of labor to afford this at $15/hour)
Federal and State Tax Return Prep: $180 (≈1.5 days working every waking hour at $15/hour)

SmartAsset stated that small business owners should expect to pay between $1,000 and $1,500 (≈2.5 weeks of non-stop employment at $15/hour - more than most exam periods) 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 (≈1.5 days of consecutive work at a $15/hour job) for other tax services.

The average cost for specific services includes $166 (≈1.4 days of consecutive work at a $15/hour job) for disorganized or incomplete files, a $377 (≈3.1 days of labor continuously at a $15/hour wage) 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