Cost for CPA to do your taxes

[Sunset]

We used a CPA for 34 years; the same one since the mid-90's. He had a fee schedule: flat fee (I think last year's was $675) for a basic 1040 and one basic State return, plus additional charges for each schedule, 1099, and calculation (e.g. AMT).

For the first few years, an hour's private consultation was included; then he started a partnership, which instated an hourly fee (I think it was $250).

Our returns cost between $1300 and $2200; the higher amounts were for years when we had rental property or sold real estate. The amount of work on our end (organizing, answering questions) was considerable. But we were leery of doing it ourselves.

2020 is the first year I will attempt to do our taxes myself. No real estate sales, no rentals, no state return. Wish me luck!

Wow....... I figured I was saving $200 by doing our return myself, never realized I was saving $2,000 or more.. per year !!

I feel richer

 

[gamboolman]

Olo,

That sounds about right based on our CPA costs for the last 25+ year.

We pay about $600 per year now for our CPA. As you would expect, we have seen that increase over the years.

But our taxes are for living/working overseas as Married Accompanied Expats. 2020 Tax Year will be our last year with International aspect as I am retiring effective 1-Feb-21....

For us with the International aspect - cost of CPA is just a part of working oversea's and with our tax return stack of paper weighing a few pounds...... well worth her cost... ha !

Your cost looks very reasonable to me.

gamboolman.....

 

[WhenIsItTime]

My wife is the CPA. I make her keep her CE up to date and license current!

 

[Koolau]

Around $700 for Fed and two states (due to old small business being sold.) Seems like a lot until I read this thread. YMMV

 

[Badger]

That simple return could be completed for free through VITA tax preparers at AARP. (I am an AARP tax preparer.) Sometimes it feels better to pay for a tax return, and I understand that as well.
VW

I did my taxes for quite a few decades with pencil and paper until I used a free computer program for a year or two. After that I found out about the free AARP tax preparers 10+ years ago. Income is SS, a few pensions, dividends, interest, small amount of capital gains, and RMDs for a standard deduction form. Not much changes each year so it is pretty easy. I like the fact that the tax preparation is being done on a respected computer program with additional inspection of the work by 1 or 2 more additional trained volunteer tax preparers that have always been pleasant and helpful.


Cheers!

 

[CoolChange]

It sounds like I got a real bargain the last time I had a CPA review my taxes. I had completed all of the paperwork but was not sure that I had handled some incentive stock options and local taxes correctly.

This tax review cost me $85; she only found one deduction that I had taken which was questionable, less than $20 impact on my taxes due.

I have been doing my own with TaxAct for years but may try rolling my own spreadsheets this year.

 

[friar1610]

That simple return could be completed for free through VITA tax preparers at AARP. (I am an AARP tax preparer.) Sometimes it feels better to pay for a tax return, and I understand that as well.

VW

If I pass the certification test (I must do it by Sunday) I will be an AARP Preparer this year. As someone who has always used TT or H&R Block programs (and found our taxes quite easy, I’m amazed how little I really knew. There are some really strange tax situations out there and, as you know, the really hard stuff is out of scope. It’s been an education!

 

[VanWinkle]

If I pass the certification test (I must do it by Sunday) I will be an AARP Preparer this year. As someone who has always used TT or H&R Block programs (and found our taxes quite easy, I’m amazed how little I really knew. There are some really strange tax situations out there and, as you know, the really hard stuff is out of scope. It’s been an education!

Welcome to the VITA tax family!! Thank you for volunteering, you will find
it to be rewarding and educational.

Best to you,

VW

 

[target2019]

Those who have always dropped off their tax information at the CPA shop are paying a serious convenience charge, IMO. It makes sense to pay that when you're earning salary, and don't have the time to learn or get going with DIY tax prep. But as you age, accumulate more, and pay more, it makes sense to understand what goes into the submission.

Everyone's situation is different, so you have to learn about the basics as well as the other needs you have (partnerships, rentals, 1099's). You cannot DIY properly with a late decision on your part.

I'd recommend paying for H&R Block online course (or in-person) well before the tax season. Maybe even go with VITA for a year or two to get comfortable. That gives you the basics.

Then you can play with last year's forms and return, and see if you come up with similar results to what your CPA filed.

If you have what I call an average return, you'll spend too much time (I know you'll say this over and over) entering information the first year. This is why I recommend a practice year. But in subsequent years, if your situation stays relatively the same, it is minor work to purchase and use next year's software to enter in numbers as the forms hit your digital and postal boxes.

 

[H2ODude]

I know I could easily do ours with Turbotax or the like, did that many years ago. Got a little complicated when DW was doing real estate, had some other complexities as well. Started using a CPA and have used for probably 20 years at least. Currently up to $300 a year. Best investment ever. There were a couple of years that he was able to save every dollar I ever have paid him. It's worth it to have someone I can call and get a knowledgeable answer as part of that annual price.

I will admit that there is a disadvantage. That is that I really have lost whatever detailed knowledge of taxes I used to have other than the general trigger points to be avoided. The whole tax process just drove me nuts. So overly complicated, if this number exceeds that number go to this line and raise it to the third power base 10.

 

[Stormy Kromer]

My CPA has charged $450 the last couple years, I give her $500 and consider it a deal.


I have a business sale contract, farmland, rental house, several 1099's to send out, plus about a dozen income 1099's and other small head aches. My return is the size of the old Sears Christmas catalogs.


She does my son's return for $125. A simple W-2 with a couple 1099's.


I fear the day she retires.

 

[leftymd]

Been doing VITA/AARP for 9 years. Really enjoyed it in the past. Not sure of participation this tax season even though have already passed certifications. Virtual tax prep will be slow and asking clients to scan and email tax docs will never be efficient. Access to TaxSlayer is a valuable aid in year to year tax planning.

 

[Time2]

I paid $600 in 2017, and 2018, but that included business income and all that comes with it. In 2019 we had no business and just our investment income. The accountant still billed my $600! I complained, he knocked it down to $400. He should have kept it, because I won't go back, I suspect he figured I have a lot of assets, so he may as well convert some of my assets to his assets.

 

[Dtail]

My parents' CPA charges $1275 for a 1040/state, irrevocable trust, business, another trust.

 

[pb4uski]

My wife is the CPA. I make her keep her CE up to date and license current!

Why? You don't need to be a CPA to prepare taxes. I gave up my certificate after I retired. Funny thing is that during my entire 34 year career I never really "needed" to be certified... I never did anything that I legally needed to be certified to do. In fact, there were a few years when I was in consulting with one of the big 4 that I hadn't kept up on CPE and was inactive and no one noticed or cared.

 

[friar1610]

Been doing VITA/AARP for 9 years. Really enjoyed it in the past. Not sure of participation this tax season even though have already passed certifications. Virtual tax prep will be slow and asking clients to scan and email tax docs will never be efficient. Access to TaxSlayer is a valuable aid in year to year tax planning.

Yeah, it will be quite the experience for me - maybe easier to accept since I don’t have the experience of doing it in “the good old days”.

Passed the cert tests today.

 

[Raygun99]

Unless the MLPs are inside your IRAs I would consider dumping them for other types of less Tax intensive tracking. Inside IRAs are not generaly required to report unless there are some UBTI

 

[kgtest]

I've always done my own...since I was 15 and starter reporting income.

DBAs, LLC pass-thrus, multiple S-corps, real estate... it gets tricky...one year when I moved 2x in the year my paper filings were over 100 pages

I've made mistakes, had to amend, filed an extension, and done it perfect most of the time.

The hardest part, keeping good records in the first place...I liken it to dieting without eating proper if you try to account for taxes without actually...well accounting for it. I use spreadsheets to track all the noise.

I started using TurboTax in like 2009 or something and never looked back.

I will be back to filing 1120 business gain/loss so prob need to pay for Business version of TT EOY. I feel like I could be a CPA at times. I've spent a LOT of time researching tax code.

 

[ArmchairMillionaire23]

Hi folks,

I have been going to the same accountant for the last ten years. The annual fee has gone from $400 to $750. This is for a joint return with standard deduction.
Thanks for your input!

Holy cow!
I guess we're lucky to live in such a low cost of living area. The wife and I have gone to the same CPA for the last 12 years and he charges us $75 to do our taxes for us. One year it was $80 because we had to file a separate state tax return in another state due to the sale of a project house.
The first year we were married we went to H&R Block™ and they charged us $125 and missed a few deductions or credits so we never went back.
Hopefully it's still $75 this year.

 

[CSdot]

Not sure what a MLP is (multi-level partnership?), but $750 sounds very reasonable. Comparing today's cost with the cost 10 years ago isn't exactly fair.

I wish my health insurance cost what it did 10 years ago.

 

[Dtail]

Not sure what a MLP is (multi-level partnership?), but $750 sounds very reasonable. Comparing today's cost with the cost 10 years ago isn't exactly fair.

I wish my health insurance cost what it did 10 years ago.

Master Limited Partnership and they can get involved tax wise.

 

[Curmudgeon44]

Three cheers for the VITA and AARP TAXAIDE free programs! I am looking at my 21st year if I am counting it correctly.

VITA advertises an upper income limit, $60K or so. TAXAIDE has no income limit although there is a complexity limit, our training only goes so far. Am proud to say our error rate on tax returns is better than the IRS internal rate.

In a normal year you "pay" in terms of waiting, it's hard to say what it will be like in a Covid-19 year.

 

[street]

Three years ago was the last time I had a CPA do my taxes. He has done them for over 30 year and the last few years it was ~1000$. I didn't get anything special for that ridiculous cost. I just went to H&R Block yesterday for the 3rd year and just love their service. I do know them but very professional, knowledgeable and a great experience each time I've used them. I do have a little extra then just a simple filing but still only cost me ~400$ with H&RB.

 

[Nightingale9]

I think if you buy an MLP in an IRA, either traditional or Roth, it generates Unrelated Business Income in the IRA, requiring a tax return and tax liability in an otherwise tax exempt entity. I would try to avoid that.

 

[JohnRM]

It's complicated

$375 for 2019 tax returns.
Not a CPA.
Have been using same family-owned firm since 1980. Very happy with services.
Had/Have:
W2
SS
pension
tiny business with Schedule C (and forms 8895, 8949, Schedules SE, D)
HSA - in/out
taxable retirement account (int, div, capital gains/losses)
tIRA withdrawals
Roth conversions

For grins, last year I compared CreditKarma's free service with the tax guy and the difference was <$100 in taxes owed. Did not analyze why. I suspect something in the Schedule C.

Dave's situation is roughly the same as ours, no SS yet but I do have investments and accounts in various places, lots of 1099 forms.


I think the accountant was $450 last year but she is very good and knows all the ins and outs. I could do it myself but I think that having a CPA puts me in a better place if I ever get audited.