From WSJ What tax preparers really charge

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With tax season just around the corner, the National Society of Accountants has surveyed its members to determine average tax-return preparation fees by form and by region. The group has 11,000 members, most of whom are sole practitioners or work at smaller firms. They have various credentials, including CPA, IRS enrolled agent and accredited tax preparer.

According to the survey, the average cost to prepare an itemized Form 1040 with a Schedule A (for itemized deductions) and a state tax return is $246. The average rate for a return without itemized deductions is lower: $143.

“I think most people would say this is worth the money,” says NSA official John Ams. “Just reading the return instructions can take hours.”

The survey also reported the average fees for preparing other IRS forms, including the following:

• $205 for a Form 1040 Schedule C (business)
• $556 for a Form 1065 (partnership)
• $759 for a Form 1120 (corporation)
• $717 for a Form 1120S (S corporation)
• $468 for a Form 1041 (fiduciary)
• $628 for a Form 990 (tax exempt)
• $59 for a Form 940 (Federal unemployment)
• $134 for Schedule D (gains and losses)
• $155 for Schedule E (rental)
• $185 for Schedule F (farm)

The survey also found that tax-preparation fees varied by region, firm size, population, and an area’s economic strength. Here is the average fee for an itemized Form 1040 with Schedule A and a state tax return in different U.S. census districts:

• New England (CT, ME, MA, NH, RI, VT) – $237
• Middle Atlantic (NJ, NY, PA) – $258
• South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) – $253
• East South Central (AL, KY, MS, TN) – $279
• West South Central (AR, LA, OK, TX) – $226
• East North Central (IL, IN, MI, OH, WI) – $225
• West North Central (IA, KS, MN, MO, NE, ND, SD) – $196
• Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) – $233
• Pacific (AK, CA, HI, OR, WA) – $288

All fees assume that a taxpayer has gathered and organized necessary information and provides it to the preparer on time. The average fee to file an extension is $41, though that figure rises to $80 if information isn’t submitted at least 15 days ahead of a filing deadline.

A spokesman for the group adds that nearly all its members offer free consultations.

• Tax preparation

[SCL]

damn...i'll have to show the article to my clients when i increase their bill 50 - 100%, especially on the non sch a forms and schedules.

[RitaB]

My first thought was, "Really? These people may be the ones they are surveying to come up with "The time it takes to prepare Form OMG" in all the pubs. Hahaha.

[Janitor Bob]

Wow...not in my area of Ohio....average rate for a 1040 with Sch A is $100 max

[Jack from Ohio]

Apparently, I work too cheap!!

[Guest Taxed]

I can tell you right now if I asked $237 for a 1040 with Sch A, I would be out of business! I suspect this survey was done with CPA and EA firms predominantly because the fees for 1040 forms are ridiculous. The business form charges seem to be average of any medium accounting/tax shops.

I would love to see the raw data of the survey, much like the IRS stats. worksheets that break it down by zipcode, income etc.

A much better and pragmatic survey would have been comparing the rates of HRB, JH, Taxland, Liberty etc. the firms that we compete against each season. Honestly i have never lost a client to a CPA firms. It has usually been the golfing or fishing buddy's friend who is also doing taxes out of his home.

If i count in the last 5 years, i probably got 50% of clients who left me back because they thought the grass was greener on the otherside!

If a client leaves me, i still keep them on my newsletter list for 3 yrs, until they say to quit sending them. I think in the last 5 years i may have gotten 10 former clients tell me to stop.

[Lion EA]

I may raise my fees again. Although in CT, nearer NY than the rest of New England with lots of NY returns. I don't compete with HRB. I work with small businesses and investors with fat returns. I don't even try to compete on price. I lose a client every once in a while to a cheaper preparer, but I gain even more new clients from referrals from current clients.

[HV Ken]

A tax return can often be an important financial document - it's used to secure loans, on FAFSA applications, even to rent an apartment. As such, it can no longer be treated as a commodity and solely differentiated by price. The preparer's experience pays a huge part in the preparation and can go a long way in protecting a client from filing an erroneous return and getting hit with interest and penalties. If all the client has is a W-2, then maybe price matters. But when dealing with people with rental properties, sole proprietors, day traders, etc., I think the preference is with a preparer with experience and the client should recognize the value they are receiving.