The Cost of Using a Paid Tax Preparer


Editor's Note: This article is part of our 2013 Tax Tips series. Robert Flach is an expert with almost 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.

NEW YORK (MainStreet) — What will it cost to have your 2013 income tax returns prepared by a professional? More than last year.

According to the annual fee survey conducted by the National Society of Accountants (aka the "other" NSA), the average cost of hiring a tax professional to prepare your Form 1040 with Schedule A and state tax return will be $261, a 6% increase from the $246 average fee from last year's survey. The average fee for preparing a non-itemized Form 1040 and state return will be $152, up from $143.

Paying a tax professional is worth the cost. If a tax pro can catch even one deduction or credit you would otherwise have missed, it can easily pay for the tax preparation fee.

The survey also reported the average fees for preparing other tax forms:

  • $218 for a Form 1040 Schedule C (sole proprietor)
  • $590 for a Form 1065 (partnership)
  • $806 for a Form 1120 (corporation)
  • $761 for a Form 1120S (S corporation)
  • $497 for a Form 1041 (estate or trust)
  • $667 for a Form 990 (tax exempt)
  • $63 for a Form 940 (federal unemployment)
  • $142 for Schedule D (capital gains and losses)
  • $165 for Schedule E (rental income)
  • $196 for Schedule F (farm)

As one would expect, fees vary by region, firm size, population and economic strength of an area. The average fee for a Form 1040 with Schedule A and a state tax return in the various sections of the U.S. are:

  • $251 in New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont)
  • $274 in the Middle Atlantic (New Jersey, New York and Pennsylvania)
  • $270 in the South Atlantic (Delaware, the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia)
  • $294 in the East South Central (Alabama, Kentucky, Mississippi and Tennessee)
  • $242 in the West South Central (Arkansas, Louisiana, Oklahoma and Texas)
  • $238 in the East North Central (Illinois, Indiana, Michigan, Ohio and Wisconsin)
  • $208 in the West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota)
  • $245 in the Mountain area (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming)
  • $303 in the Pacific area (Alaska, California, Hawaii, Oregon and Washington)

These fees assume a taxpayer has gathered and organized all necessary information. The less organized the client, the greater the fee.

--Written by Robert D. Flach for MainStreet

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