WASHINGTON, D.C. (JANUARY 14, 2015)
The average fee for preparing a tax return, including an itemized Form 1040 with Schedule A and a state tax return, will increase a few dollars to $273 this year, a 4.6 percent increase over the average fee of $261 last year, according to a survey by the National Society of Accountants.
The figure also represents an 11 percent increase from two years ago when the survey was conducted.
The average cost to prepare a Form 1040 and state return this season without itemized deductions is expected to be $159, also a 4.6 percent increase over the average fee last year, which was $152. It is an 11.2 percent increase from two years ago.
“When you consider that it takes the average taxpayer five hours to complete a tax return, this is a very strong value,” said NSA executive vice president John Ams in a statement. “The tax code continues to become more complex each year, including some new Affordable Care Act reporting requirements. Professional tax preparers may also be able to find tax deductions and credits that may taxpayers might not notice.”
The NSA collected the fee information during a survey of preparers. The tax and accounting firms surveyed are owners, principals, and partners of local “Main Street” tax and accounting practices who have an average of more than 27 years of experience.
NSA member tax preparers typically hold multiple credentials that demonstrate their expertise, including Enrolled Agent, CPA, Accredited Tax Preparer, Accredited Tax Advisor, and others.
The survey also reported the average fees for preparing additional Internal Revenue Service (IRS) tax forms, including $174 for a Form 1040 Schedule C (business), $634 for a Form 1065 (partnership), $817 for a Form 1120 (corporation), $778 for a Form 1120S (S corporation), $457 for a Form 1041 (fiduciary), $688 for a Form 990 (tax exempt), $68 for a Form 940 (Federal unemployment), $115 for Schedule D (gains and losses), $126 for Schedule E (rental) and $158 for Schedule F (farm).
The NSA noted that the fees vary by region, firm size, population, and economic strength of an area.
The average tax preparation fee for an itemized Form 1040 with Schedule A and a state tax return in each U.S. census district are:
• New England (CT, ME, MA, NH, RI, VT) – $246
• Middle Atlantic (NJ, NY, PA) – $314
• South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) – $268
• East South Central (AL, KY, MS, TN) – $262
• West South Central (AR, LA, OK, TX) – $205
• East North Central (IL, IN, MI, OH, WI) – $240
• West North Central (IA, KS, MN, MO, NE, ND, SD) – $198
• Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) – $256
• Pacific (AK, CA, HI, OR, WA) – $348
Most accounting firms offer prospective clients a free consultation, the NSA pointed out, which can be worth well over $100 based on the hourly fees of most tax preparers.
All the fees cited assume a taxpayer has gathered and organized all the necessary information.
Taxpayers should also make sure they provide information on time to avoid additional fees, the NSA noted. Many tax preparers will charge an average fee of $114 for dealing with disorganized or incomplete files.
Some will charge an average fee of $42 to file an extension, an average fee of $88 to expedite a return, and an average fee of $93 if information is not provided in advance of an agreed-upon deadline. For taxpayers who are audited by the IRS, the average hourly fee to handle the audit is $144.