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How Much Does a CPA Cost?

Nobody likes paying taxes, so having to pay high prices just to get your taxes done can feel like adding insult to injury. But preparing your tax return on your own can be risky. Overlooked deductions and simple mistakes can end up costing you thousands of dollars in overpaid taxes or fines and penalties.

For that reason, many small business owners hire a Certified Public Accountant (CPA) to handle their taxes and provide other tax, accounting, and business advice. But how much does a CPA cost?

According to the National Society of Accountants, in 2020, the tax preparation fees average anywhere from $220 for a Form 1040 claiming the standard deduction to $913 for a corporate tax return (Form 1120).

Of course, those are averages. The actual fees can depend on your location, the CPA’s experience level, the complexity of your financial situation, and the level of service you need.

What does a CPA do?

CPA isn’t a job title; it’s a certification, and CPAs do many things. Some work as chief financial officer (CFO) for Fortune 500 companies, some audit financial statements, and some act as advisors and consultants on many issues, including accounting and taxes.

Here’s a look at different services a CPA might provide and the estimated cost for performing these services.

Financial statement compilations, reviews, and audits

Compilations, reviews, and audits lend credibility to a company’s financial statements. They may be required by lenders, regulators, or investors. A compilation is the most basic level of assurance because the CPA mainly does a cursory check of the company’s financial statements to ensure there aren’t any obvious issues.

A review is one step up from a compilation. The CPA reviews the financial statements, makes inquiries of management and other employees about the company’s accounting practices, and performs analytical procedures to look for potential errors.

A financial statement audit is the highest level of assurance. The CPA is required to make inquiries, perform physical inspections, confirm balances, and perform other tests to ensure the financial statements are free from material misstatements.

Audits are the most expensive level of service a CPA provides in this area since they take the most time. According to Audit Analytics, for audit-related fees, CPAs charge an average of $548 per $1 million in revenue in 2019. So a company with $5 million in revenue can expect to pay, on average, $2,740 for an audit — less for compiled or reviewed financial statements.

Tax planning and tax preparation

CPAs can help individuals and businesses with tax planning and tax filing. This can include state and federal income tax returns, payroll tax returns, and sales and use tax returns. CPAs are required to maintain their tax and accounting knowledge with continuing education each year, so they’re familiar with the latest tax changes.

Fees for tax preparation services can vary widely depending on the type of tax return you need, the complexity of your return, and other factors. However, according to the National Society of Accountants, the average cost of tax services from a CPA is $174 per hour.

Further reading: How Much Does it Cost to File Taxes?

Business advising and consulting

Individuals, businesses, nonprofit organizations, and government agencies turn to CPAs for objective advice in both strategic and financial areas. This advice can cover a variety of areas, such as getting funding, improving cash flow, and more.

The National Society of Accountants reports that the average rate for management advisory services is $158 per hour. Many CPA firms also package advisory services with traditional tax and accounting services for a set monthly or annual fee.

Forensic accounting

CPAs specializing in forensic accounting use their financial knowledge and investigative skills to assist with actual or anticipated disputes or litigation. Their specialization might allow them to quantify losses and economic damages for an insurance claim or breach of contract lawsuit, value a business as part of a dispute between business partners, or search for hidden assets in a divorce case.

According to ThePricer.org, forensic accountants typically charge anywhere from $300 to $500 per hour.

These are just a few of the services a CPA can provide. Some offer personal financial planning services, human resources or technology consulting, startup assistance, estate planning advice, and more. Fees for their services can vary quite a bit, so be sure to shop around when you’re ready to hire an accounting professional.

Is it worth it to hire a CPA?

A good CPA may cost you more upfront, but they can pay off in the long run by helping you identify tax-savings opportunities, preparing the financial statements you need to get outside investors or loans, and providing advice to help your small business grow.

But not every business needs someone with a CPA certification. For example, if you have a small business with few transactions, a straightforward tax return, and little need for additional expertise, you may just need accounting software or bookkeeping help. If you have a basic understanding of tax laws, you might prepare your own tax return with the help of DIY tax software. However, you might want to consider working with a professional accountant if any of the following situations apply to you:

  • You need audited financial statements. Only a CPA can issue audited financial statements and an auditor’s report.

  • You plan on taking your company public someday. In the U.S., public companies are required to issue financial statements based on generally accepted accounting principles (GAAP). GAAP is a set of rules designed to help companies measure and report their financial performance in the same way, which helps investors analyze and compare one company’s financial statements to other organizations. Public companies are also required to have documented internal controls and follow other regulatory requirements. A CPA can help you comply with all requirements so you’re ready for an eventual initial public offering (IPO).

  • Your tax situation is complex. If you need a consolidated tax return, claim the Research and Development Tax Credit, or have other tax complications, a CPA can ensure your tax return is filed properly.

  • You have IRS problems. CPAs, Enrolled Agents (EAs), and tax attorneys are the only professionals that can represent taxpayers during an IRSaudit or tax dispute.

  • You need more in-depth advice. Many CPAs provide advisory and consulting services that extend beyond basic financial issues.

If you’re on a budget (and what small business owner isn’t?), here are some things you can do to make working with a CPA more affordable.

  • Build a long-term relationship. If you find a CPA you trust and enjoy working with, stay with them. When you work with the same CPA year after year, they gain a deep understanding of your business and how you operate. This makes it easier for them to provide customized advice or spot problems, such as rapidly rising costs, falling revenues, and even signs of employee fraud. Also, audit fees tend to be higher the first time a CPA firm performs a financial statement audit because the auditors have to spend more time understanding your business and industry and testing internal controls. Sticking with the same accounting firm year after year saves your auditor time, which can help keep costs low.

  • Be organized. Show up at your CPA’s office with a box of receipts and expect your accounting fees to be higher. It can take hours for your CPA to organize your receipts and financial documents into a tax-ready format, and they’ll charge you for that extra time. On the other hand, if your bookkeeping is accurate and organized, it saves your CPA a lot of time, whether they’re preparing your tax return or providing compiled, reviewed, or audited financial statements. This can lower your bill considerably.

  • Seek out proactive advice. Reach out to your CPA for advice before buying or selling a business, investing in fixed assets, hiring an employee, or making other big decisions. They can ensure you structure transactions in the most beneficial way possible.

How Bench can help

While some CPAs provide bookkeeping services, not all do. And paying CPA rates for bookkeeping services may not be cost-effective.

A bookkeeper (like the ones at Bench) usually charges less than a CPA, so it makes sense to rely on them for recording routine business transactions and preparing monthly and year-end financial statements.

Throughout the year, you’ll have accurate, up-to-date financial information you can take to your CPA to help with tax planning and preparation, applying for a small business loan, getting strategic advice, or audited financial statements.

Bench works well with your CPA because we’re an affordable online bookkeeping solution for small to medium-sized businesses, and good tax planning, accounting advice, and advisory services start with good bookkeeping.

So if you want to save yourself time, money, and aggravation, consider using Bench in tandem with a CPA. This ensures you get the best of both worlds at a budget-friendly price. Then you can get back to doing what you do best—running your business!

What's Bench?

We're an online bookkeeping service powered by real humans. Bench gives you a dedicated bookkeeper supported by a team of knowledgeable small business experts. We’re here to take the guesswork out of running your own business—for good. Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Get started with a free month of bookkeeping.


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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