The average small business tax return for a Schedule C costs $187, according to the National Society of Accountants (NSA). A personal income tax return costs an additional $294 (or $188 if you take the standard deduction and don’t itemize).
But what you actually end up paying could be different. For instance, if you hire an accountant just for tax season, you’ll face different fees versus hiring an accountant year-round, so it depends on your depth of need.
How Much Will an Accountant Cost?
How much does an accountant cost for a small business owner? It depends on a variety of factors:
- Type of Business – While a simple Schedule C return for a sole proprietorship or single-member LLC only costs $184, more complicated small business tax returns cost much more: $656 for a partnership, $809 for an S-corp and $826 for a corporation, according to a previous NSA report.
- Location – Accountants in the Pacific, Mountain and East Coast regions are the most expensive and charge significantly more than other parts of the country.
- Additional Services – If you need other services, like managing payroll and preparing W-2s, expect to pay an additional fee; the typical accountant charges $88 per hour for payroll work.
- Late/Disorganized Tax Files – 72% of accountants charge a fee when clients bring in disorganized or incomplete tax files. They could also charge a fee if you miss deadlines to send in your documents, need to expedite submitting your return, or file an extension.
How Can You Manage Accountant Costs?
Knowing your tax return expenses ahead of time can help you budget accordingly, but there are also other methods for managing costs. Besides putting money aside, one of your best moves is to keep your records in order, which will help you avoid that average $133 penalty for submitting disorganized tax files.
Small business accounting tools can help you handle some of the work on your own, like managing payroll, so you can hire an accountant solely for your returns.
Finally, learn to see hiring an accountant as an investment: The money you spend now could come back several times over by helping your business qualify for extra tax breaks and avoid IRS penalties.
If you need to bring on an accountant for tax season, you can lean on a short-term business loan to cover some of the upfront costs.