Average Cost of Tax Preparation by A CPA: What Smart Filers Really Pay
If you're trying to figure out how much you'll pay for tax preparation by a CPA, you're not alone.
Every year, taxpayers and small business owners alike search for clear, trustworthy answers about what a tax return will cost. And with so many types of tax situations to consider, the answer isn’t always simple.
Let’s break it down so you can understand what influences CPA tax preparation fees, how to anticipate costs, and how to choose the right tax professional for your needs.
What Is Tax Preparation and Why Hire a CPA?
Tax preparation is the process of organizing, calculating, and filing your tax return. This includes your income, deductions, credits, and any other applicable tax information reported to the IRS. A Certified Public Accountant (CPA) is a licensed professional with advanced education and experience in tax law, accounting, and finance.
Whether you're an individual or a business owner, choosing a CPA for tax preparation offers:
Accurate and compliant filing with IRS tax forms like Form 1040
Proactive tax planning strategies for better tax savings
Lower audit risk and better handling of complex tax issues
Representation in case of an income tax audit
The Average Cost of Tax Preparation by CPA in Denver
The average cost of tax preparation by CPA in Denver varies based on the complexity of your tax return and the type of tax work involved. However, typical ballpark numbers include:
According to current tax industry statistics, the average cost of tax preparation by a CPA in Denver for an individual tax return is about $800 for individual tax returns involving itemized deductions.
Factors That Affect CPA Tax Preparation Fees
There are several factors that affect CPA tax pricing, and it pays to know what can drive the number up or down.
Complexity of Your Tax Return
The more complicated your return, the more time a CPA will need to spend reviewing and preparing it. Complexity can arise from:
Owning rental property
Having multiple streams of business income
Claiming large capital gains
Operating as a sole proprietorship, S Corp, or Limited Liability Company
Filing in multiple states or countries
Needing detailed bookkeeping corrections
Type of Tax (Individual vs. Business)
The type of tax you're filing plays a major role. For instance, individual tax returns generally cost less than business tax preparation since they require less documentation and reporting.
Fee Structure: Hourly vs Flat Fee
CPAs typically charge under one of two billing models:
Hourly rate: Ranges from $100 to $400 per hour, depending on experience and specialization.
Flat fee: This is pre-negotiated based on the estimated complexity and time required.
For example, a simple return with a W-2 and basic deductions may run around $250 under a flat fee model, while hourly rates are more common with complex tax situations, especially during tax season when CPAs are at peak demand.
Type of Business Entity
If you’re a small business owner, the structure of your business influences pricing:
Sole proprietorship: Typically includes a Schedule C on a personal return
Partnership or S-Corp: Requires separate business tax return filings
Corporation: Typically, the most expensive to file due to regulatory requirements
CPA Tax Preparation Costs for Businesses
Navigating business tax regulations can be overwhelming. A good CPA helps ensure your corporate tax returns and business and individual tax returns stay compliant.
Here’s what small business tax preparation costs might look like in Denver:
Sole proprietorship with Schedule C: $500 - $900
Partnership/S-Corp/LLC return (plus K-1s): $900 - $1,500
C-Corp filing with payroll & assets: $1,200 - $2,000+
You’ll often see higher fees when payroll, capital gain calculations, or inventory tracking are needed.
When Does Hiring a CPA Make Financial Sense?
While you can always use online tax software, it may not maximize your deductions or handle IRS penalties or audits.
Here’s when hiring a CPA for tax preparation by a CPA makes sense:
You’re self-employed or own a side business
You've had major life events (marriage, inheritance, property purchases, retirement)
You own rental properties
You sold stocks, started a partnership, or received a capital gains tax in the United States
You’re worried about errors on your tax return
You need tax planning services beyond just filing
Working with a tax preparer or CPA helps mitigate risk and may help reduce the time a CPA spends fixing issues later.
Understanding CPA Tax Preparation Fee Structures
Not all CPAs bill the same way. Here’s a look into typical fee structures and how they relate to the cost of tax preparation services.
Flat Fee
This is ideal if you want predictability in budgeting. CPAs may offer a flat fee for:
Simple W-2-based individual returns
Basic Schedule C filings
Personal tax preparation with standard itemized deductions
Average flat fees:
Basic tax return: $250 - $350
With itemized deductions: $350 - $600
Business tax returns: $700+
Hourly Rate
More common with complex returns, consulting, or tax advice. You might see hourly rates if:
You need help with multiple entities
There’s a lot of tax planning
Prior year returns need corrections
Average hourly rates in Denver: $150 - $300/hour, depending on experience and firm size.
Combined Models
Some CPAs use hybrids: a base fee for prep plus hourly billing for reviewing complex documents, tax strategies, or resolving past filing issues.
Small Business Owners: What CPAs Can Do for You
For small business owners, a CPA can:
Keep your finances audit-ready
Handle bookkeeping, expense tracking, and budget analysis
Assist with tax liability forecasting
Maximize itemized deductions and tax avoidance strategies, smartly and legally
Guide you in choosing the right ownership structure and ensure regulatory compliance
In other words, the overall cost of hiring a CPA can actually be an investment in savings and reduced risk.
How to Choose the Right Tax Preparer or CPA
Choosing the right professional starts with understanding your needs. Here’s what to consider:
Credentials: Look for a licensed CPA or Enrolled Agent
Experience with your specific tax situation (business, investments, real estate)
Transparent pricing
Willingness to offer tax planning services, not just tax prep
Local knowledge of Denver tax codes and IRS rules
Before you commit, ask:
What is your pricing or fee structure?
How many years have you been handling tax returns for businesses/individuals?
Will you be available after tax season for help?
Need a real expert in your corner? AY Miller’s experienced Denver tax accountant team can help you understand your situation and offer the right guidance all year long.
How CPAs and Tax Professionals Add Value
Beyond preparing your return, CPAs and tax professionals help with things like:
Strategic tax planning services for retirement or large purchases
Preparing you for potential IRS audits
Offering insights into tax-efficient investment decisions
Minimizing the cost of filing long-term
Especially in Denver, where the cost of living and business activity vary, a local CPA understands how to optimize your filing.
DIY vs. CPA: What’s the Real Difference?
Choosing between a do-it-yourself approach and working with a CPA depends on the complexity of the tax and your confidence.
Using online tax software may cost less upfront, but could lead to costly oversights or missed tax deduction opportunities.
Final Thoughts: What Does a CPA Tax Preparation Really Cost in Denver?
So, how much does tax preparation cost when you hire a CPA in Denver?
Simple returns: $250 - $350
Itemized individual tax return: $400 - $800
Small business tax returns: $600 - $1,500+
Complex returns involving multiple forms: $1,000 - $3,000+
The cpa cost depends on the complexity of your tax situation, whether you're filing personal tax or business income, and what kind of tax service you need.
Yes, these fees may feel like an upfront cost, but the tax savings, peace of mind, and reduced audit risk can be more than worth it.
Take Control of Your Tax Future
If you're a Denver-based taxpayer or small business owner wondering if a CPA is worth the investment, ask yourself one thing: can you afford a costly mistake?
Working with an experienced CPA to file your individual tax return or perform your business tax preparation could save you money and stress in the long run.
Ready to work with a trustworthy expert? Schedule a consultation with our Denver tax accountant team today and feel confident before tax season ever starts.
