Often when people find out I’m a tax accountant, I get asked, “How much does a CPA cost?” It’s like me asking “How much does a home cost?” We all understand that a 1,000 square-foot home in Kansas has a different cost than a 1,000 square-foot penthouse condo in New York City. The same concept applies to CPAs.
The answer to both questions is the same: it depends. For example, my uncle has a simple tax return and pays $250 in preparation fees. On the other hand, I had a client whose return took over a week to prepare when I worked in a large firm, which cost the client around $100,000.
A good CPA may cost you more upfront but will pay off in the long run because he or she is thorough. Anyone can drop numbers in software. However, a CPA will analyze the situation to look for tax savings opportunities and help you plan for next year – in short, they become your trusted advisor. I once had a client whose former preparer had cost her an additional $4 million in taxes because he didn’t consider accelerating her fourth quarter estimated tax payment to December from January.