How Much Do Tax Preparers Charge?

One of the best parts of owning your own business is being in control of your income and expenses. When you are a tax preparer, you get to set your own tax preparation fees. Learn more about how you can set up your price structure when you partner with TaxSlayer Pro.

Key takeaways on how much tax preparers should charge

As a tax preparer, you can set your own tax preparation fees, allowing a pricing model that reflects your expertise and operational costs.
Consider implementing a flat fee for straightforward returns or an hourly rate for more complex situations to maximize your earnings.
Tax preparation fees differ significantly across the U.S. Understanding these differences can help you position your services competitively.
Beyond tax preparation, consider offering ancillary services like bank products, audit assistance, and identity protection to increase your revenue potential.
IRS guidelines require tax preparers to be transparent in their pricing structure, including fixed prices, hourly rates, and any additional costs. Once fees are published, you must adhere to them for at least 30 days.

Factors that can affect tax preparation fees

As you set your tax preparation fees, several key factors will affect your pricing strategy. Understanding these factors is essential in setting competitive and fair prices and ensuring you cover your costs and earn a profit.

Whether to implement a flat fee or an hourly rate: Flat fees are a straightforward structure that offers clients clear and predictable prices. However, an hourly rate might be more suitable for complex tax situations that require additional time and expertise. An hourly rate allows you to be compensated fairly for your knowledge and efforts.
The type of return you are filing: Different tax forms, such as 1040, Schedule C for business income, or Schedule D for capital gains, may necessitate varying levels of complexity and time commitment. As a result, the pricing structure might change based on the intricacies of preparing each return type.
Your competitor’s pricing: The average cost of tax preparation can vary widely by state. By researching competitor pricing in your region, you can better align your services while ensuring they are competitive and reflect local market standards.

In addition to these factors, the IRS has established guidelines for tax preparers to follow when setting and communicating their fees. The IRS advises tax preparers to create a written schedule of fees that includes the cost of initial consultations, fixed prices for routine services, hourly rates, and a range of costs for specific services.

This transparency helps clients understand your pricing structure and builds trust in your services. You should always clarify whether clients will be responsible for additional costs. Once you publish your fee schedule, you are obligated to maintain those rates for at least 30 calendar days, ensuring consistency and reliability for your clients.

Considering these factors can help you create a pricing model that balances your expertise with your clients’ expectations and adheres to the established IRS guidelines.

How much should I charge my clients for a tax return?

There are many ways to structure your pricing model. You can charge everyone the same amount, or you can create a tiered price structure depending on the type of return you file for them or the amount of time you spend on their return. When you partner with TaxSlayer Pro, you pay a one-time amount for the software. Then you get to set your own fee for each client you assist. Ultimately, your pricing structure should ensure that you cover your operational costs and fairly compensate yourself for your expertise and effort.

The latest information published in the 2021 Income and Fees of Accountants and Tax Preparers in Public Practice Survey outlines the average tax preparation fee preparers are charging. It includes both the average flat rate and hourly rate for different types of tax forms.

Tax form	Average flat rate	Average hourly rate
1040, itemized & state return	$409	$161.34
1040, not itemized & state return	$306	$153.74
1120 (C Corporation)	$913	$181.57
1120S (S Corporation)	$903	$179.81
1065 (Partnership)	$733	177.29
1041 (Estate/Trust)	$1289	$172.66
990 (Tax-Exempt Org)	$735	$171.48
940 (Federal Unemployment)	$78	$111.95
941 (Quarterly Payroll)	$96	$113.53

Note: While this survey provides a solid reference point for your pricing, it’s important to consider potential inflation and market changes since 2021.

A glance at average tax preparation fees across the country

The average tax preparation fees charged across different regions can provide valuable insight into your tax preparer rates. Understanding these averages will help you better position your services when you become a tax preparer and to remain competitive in your market.

What are additional ways I can earn revenue as a tax preparer?

As a TaxSlayer Pro user, you have the freedom to offer additional services and the flexibility to charge what you want for them. These will make your business more competitive and increase your bottom line.

Bank products

A bank product is simply a way for your clients to deduct your tax prep fees directly from their refund. This way they do not have to pay out of pocket for your services. It is also known as a refund transfer. This service is a huge selling point for clients who may not be able to afford your services otherwise. Here are some of the benefits of integrating bank products into your offering

How bank products can benefit clients:

Clients can choose how to receive the refund (check, card, direct deposit)
Clients can receive their refund in a matter of days instead of waiting 6 – 8 weeks

How bank products can benefit tax preparers:

You can receive your payment sooner
You can set your cost for this service, just like with your tax prep fees

Audit assistance

TaxSlayer Pro offers two options for audit assistance: Audit Maintenance Pro (AMP) and Protection Plus. Many clients are afraid of being audited, and these options can give them peace of mind that they will be covered if it occurs. Both programs offer perks like low enrollment cost, reliable year-round assistance, and easy set up within your software.

Identity protection

If you’re looking to help your client with identity protection and restoration, TaxSlayer Pro partners with SecurelyID. Tax identity theft is a real problem that many taxpayers face every year. Give your client the tools they need to combat cyber criminals with SecurelyID. Some of the benefits include: