The National Society of Accountants (NSA) reported the latest average tax preparation fees this as part of its biennial survey of tax professionals.
The average fee for a professional to prepare and submit a Form 1040 and state return with no itemized deductions is $176, the average fee for an itemized Form 1040 with Schedule A and a state tax return is $273, and the average fee for an itemized Form 1040 with Schedule C and a state tax return is $457.
“Tax returns are getting more complicated every year, and with so many hidden tax deductions and constantly changing tax laws, using a professional to prepare your taxes can pay off,” says NSA Executive Vice President John Ams. “Most tax and accounting firms offer prospective clients a free consultation, which is worth about $150 based on the average hourly fees of tax preparers. They can ask questions to identify potential tax savings that automatic software programs can miss and reduce mistakes.”
The tax and accounting professionals surveyed are owners, principals, and partners of local “Main Street” tax and accounting practices who have an average of 28 years of experience.
NSA member tax preparers typically hold multiple credentials that demonstrate their expertise, including Enrolled Agent, Certified Public Accountant, Accredited Tax Preparer, Accredited Tax Advisor, and others.
Average fees that tax preparers charge include:
- $273 for a Form 1040 with a Schedule A and state return
- $176 for a Form 1040 (non-itemized) and a state return
- $184 for a Form 1040 Schedule C (business)
- $124 for Schedule D (gains and losses)
- $135 for Schedule E (rental)
- $180 for Schedule F (farm)
- $656 for a Form 1065 (partnership)
- $826 for a Form 1120 (corporation)
- $809 for a Form 1120S (s corporation)
- $482 for a Form 1041 (fiduciary)
- $733 for a Form 990 (tax exempt)
- $69 for a Form 940 (federal unemployment)
- $1,563 for a Form 706 (estates)
- $413 for a Form 709 (gift tax)
- $242 for a Form 8824 (like-kind exchanges)
- $532 for a Form 5500 (pension/profit-sharing plans)
- $282 for a Form 3115 (application for change in accounting method)
- $59 for a Form 8962 (premium tax credit calculation)
- $53 for a Form 8965 (health coverage exemptions)
- $58 for a Form 1095‐A (health insurance marketplace statement)
- $57 for a Shared Responsibility Payment Calculation
Fees vary by region, firm size, population, and economic strength of an area. The average tax preparation fee for an itemized Form 1040 with Schedule A and a state tax return in each U.S. census district average:
- New England (CT, ME, MA, NH, RI, VT) – $333
- Middle Atlantic (NJ, NY, PA) – $290
- South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) – $268
- East South Central (AL, KY, MS, TN) – $210
- West South Central (AR, LA, OK, TX) – $271
- East North Central (IL, IN, MI, OH, WI) – $249
- West North Central (IA, KS, MN, MO, NE, ND, SD) – $214
- Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) – $263
- Pacific (AK, CA, HI, OR, WA) – $329
All fees assume a taxpayer has gathered and organized all necessary information. Taxpayers should also make sure they provide information on time to avoid additional fees – 71 percent of tax preparers will charge an average fee of $117 for dealing with disorganized or incomplete files.
“Time is money when working with a professional tax preparer, so you can save money by being organized,” Ams says.
The Better Business Bureau and other organizations also advise filing tax returns early to reduce the opportunity for identity thieves to file a return in your name before you do, which can lead to identity theft.
Most tax and accounting firms report they have not seen an increase in the number of IRS audits during the past two years. If you are audited, the average fee for an IRS audit response letter is $128 and the average hourly fee for an in-person IRS audit is $150.
For more information and to use an online search directory to identify a qualified tax preparer in your area, visit www.chooseataxpro.org and click on “Find a Professional” or call 800-966-6679.
NSA and its affiliates represent more than 30,000 members who provide accounting, auditing, tax preparation, financial and estate planning, and management services to approximately 19 million individuals and business clients. Most members are sole practitioners or partners in small- to medium-size accounting firms. NSA protects the public by requiring its members to adhere to a strict code of ethics. For more information, visit www.nsacct.org.