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How Much Does a CPA Cost for a Small Business?


If you’re a small business owner, you’ve probably already suffered through a few tax seasons. While taxes for individuals can be complex, filing business taxes is arguably even more challenging. Hiring a CPA, a certified public accountant, can help, but you should first understand the costs associated with getting expert tax assistance. Consider working with a financial advisor if you need financial advice tailored to your personal business situation.

How Much Does a CPA Cost?

According to accounting firm DeMercurio Advisors, a small business owner should expect to pay between $1,000 and $1,500 on average to have a CPA firm prepare both their individual and business tax returns. DeMercurio notes there are several factors that determine how expensive it would be for small businesses to hire a CPA. Here are some of the most impactful:

  • The complexity of your returns. If your business operates in multiple states, rents real estate or you have multiple business entities, your taxes are likely to be more complicated and therefore cost more money to file. Anything that makes your returns more complicated makes it more time-consuming and potentially creates the need for a CPA with more specialized knowledge, all of which can cause the cost to rise.
  • How good you are at bookkeeping. The quality of your records will also play into how much a CPA ends up charging you. If your records are organized, comprehensive and accurate, the costs are likely lower. If they’re unorganized, are missing information or contain errors, your CPA will have to fix these issues before they can even get started on filing your taxes — and you’ll see that reflected in your bill.
  • The time needed to file. Many CPAs will charge an hourly rate in addition to a flat rate per return, so the total number of hours they need to spend on your small business’s taxes will play into the total cost. The two previous points will absolutely impact the time your CPA has to devote to your return. If they’re puzzling over messy notes in the margins of your financials, having to research a complex niche business issue or answering a lot of questions for you, the bill will grow.
  • The pay range and fee structure of each firm/practitioner. Obviously, each CPA and CPA firm will have their own cost structures and price breakdowns. Based on expertise, location and internal decisions, prices can vary widely, so there won’t be a one-size-fits-all price you can expect.

Why Do You Need a CPA for Your Small Business?

How Much Does a CPA Cost for a Small Business?

While a CPA’s expertise can cost a good deal, using a CPA can actually save you money in the long run. Small business owners that do their own taxes can make mistakes that cost them more time and money. The IRS warns that small business owners often underpay estimated taxes, don’t separate business expenses correctly, or deposit employment taxes incorrectly or late — all errors that can cause the IRS to charge a penalty and in some cases may trigger an audit.

While the penalties themselves may cost about as much as a CPA would have in the first place, IRS audits can be quite costly and time-consuming. For a mail audit, the most common audit, the average amount owed is $7,000, according to H&R Block, and for an office or field audit, that amount skyrockets to $65,000.

But a CPA can often do more than just prevent you from paying fees. Because of their deep expertise in tax law, CPAs will often know ways you can reduce your tax liability, the various deductions you may qualify for and offer other strategies that can save you money on your taxes.

How Can I Lower the Cost of a CPA?

How Much Does a CPA Cost for a Small Business?

There are two simple ways that you can keep the costs of hiring a CPA low. While you may not be able to help the fact that your business structure is complex or covers multiple states, you can absolutely do a better job of keeping clean books. Make sure your records are thorough, highly organized and error-free. If your CPA can immediately understand your bookkeeping and has easy access to any paperwork or supporting documentation they may need, the time they need to spend on your taxes will be lower, and thus the cost will likely fall as well.

Another way to lower your overall tax costs is to pay your CPA to create a tax strategy for your small business. While a CPA can’t work magic, a CPA with expertise in your industry will likely have some suggestions for how you can save money with the IRS. They may also have some ideas of where you may be able to cut costs in other areas, having worked with other businesses in your sector.

Bottom Line

While a CPA can be expensive, expert help can often save you money in the long run. A CPA can develop tax strategies to help you avoid costly IRS penalties and find deductions that you were previously unaware of. But keep in mind that the actual cost of a CPA’s services will vary based on your unique situation.

Business Tax Tips

  • Some CPAs also work as financial advisors. The combination of skills can be the perfect mix for managing your personal and business finances. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Because you run your small business for profit, you can likely deduct your costs of running it. Use SmartAsset’s small business tax deduction guide to help you identify common tax deductions to help reduce your business taxes.

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