Key Takeaways
- Single-member LLCs/sole proprietors typically cost $300-$1,500. S-Corps run $1,200-$3,500. Partnerships range from $1,000-$5,000+. C-Corps cost $1,500-$4,000+.
- Each additional state adds $200-$500+ to your preparation cost, plus nexus analysis and apportionment calculations.
- Each additional partner or shareholder increases cost beyond just another K-1. It’s the coordination, basis tracking, and questions that multiply complexity.
- Poor record quality increases costs significantly. Clean books that import easily let your preparer focus on analysis instead of data entry.
- Cheap preparation can cost more than quality preparation. A missed QBI deduction on $200,000 of income costs $12,800 in tax savings.
Business tax preparation costs vary wildly because complexity varies wildly. A partnership with 3 owners, one state, and simple allocations is fundamentally different from a 15-partner structure spanning 5 states with special allocations and guaranteed payments.
When business owners ask “how much should I pay for tax preparation?” the honest answer is: it depends. But that doesn’t mean you should walk into the process blind.
This guide provides realistic price ranges by entity type, explains what factors drive costs up or down, and helps you understand when paying more makes sense versus when you might be overpaying. Transparency matters. You shouldn’t be surprised by your bill.
Table of Contents
Business Tax Preparation Costs by Entity Type
Every entity type has different filing requirements, forms, and complexity levels. Here’s what you can expect to pay in 2026.
Single-Member LLC / Sole Proprietor (Schedule C)
Typical range: $300-$1,500
Single-member LLCs and sole proprietors report business income on Schedule C, which attaches to your personal Form 1040. This is generally the simplest business tax situation.
| Complexity Level | Price Range | What’s Included |
|---|---|---|
| Simple | $300-$600 | Basic Schedule C, standard deductions |
| Moderate | $600-$1,000 | Multiple income sources, home office, vehicle |
| Complex | $1,000-$1,500 | Multiple businesses, rental integration, planning |
Factors that increase cost:
- Home office deduction requires proper square footage allocation and documentation
- Vehicle expenses with detailed mileage logs add preparation time
- Multiple business activities mean multiple Schedules C
- Estimated tax calculations and quarterly payment planning
- Self-employment tax optimization strategies
A straightforward consulting business with clean records and simple deductions falls on the lower end. A business owner with rental properties, multiple income streams, and aggressive deduction strategies will pay more.
S-Corporation (Form 1120-S)
Typical range: $1,200-$3,500
S-Corporations require their own tax return (Form 1120-S) plus Schedule K-1s for each shareholder. The complexity jumps significantly from Schedule C because of reasonable compensation requirements, shareholder basis tracking, and additional compliance obligations.
| Complexity Level | Price Range | What’s Included |
|---|---|---|
| Simple | $1,200-$1,800 | Single shareholder, one state, basic operations |
| Moderate | $1,800-$2,500 | Multiple shareholders, reasonable comp analysis, depreciation |
| Complex | $2,500-$3,500+ | Multi-state, multiple shareholders, complex transactions |
Factors that increase cost:
- Reasonable compensation analysis and documentation is required for every S-Corp owner-employee
- Multiple shareholders with different circumstances (loans, distributions, basis issues)
- Multi-state filing requirements add $200-$500 per state
- Complex depreciation schedules for equipment, vehicles, or real estate
- K-1 preparation is typically included, but more shareholders means more work
The S-Corp reasonable salary requirement alone justifies working with someone who understands the rules. Getting this wrong creates significant IRS exposure.
For a complete understanding of S-Corp taxation, see our S-Corporation Tax Guide.
Partnership / Multi-Member LLC (Form 1065)
Typical range: $1,000-$5,000+
Partnerships (including multi-member LLCs taxed as partnerships) file Form 1065 and issue Schedule K-1s to each partner. Partnership taxation is arguably the most complex area of business tax because of the flexibility in allocations and the importance of basis tracking.
| Complexity Level | Price Range | What’s Included |
|---|---|---|
| Simple | $1,000-$2,000 | 2-3 partners, single state, standard allocations |
| Moderate | $2,000-$3,500 | Multiple partners, guaranteed payments, capital accounts |
| Complex | $3,500-$5,000+ | Special allocations, multi-state, 754 elections |
Factors that increase cost:
- Number of partners directly impacts cost since each K-1 requires individual preparation
- Special allocations requiring documentation of substantial economic effect
- Multi-state filing with different allocation and apportionment rules
- Section 754 elections requiring basis adjustments when partners buy in or out
- Capital account complexity and proper maintenance
- Guaranteed payments with self-employment tax implications
A 2-partner LLC with 50/50 ownership and simple operations is straightforward. A 10-partner real estate syndication with preferred returns, promote structures, and partners in multiple states requires significantly more work.
For detailed guidance on partnership taxation, see our Complete Guide to Partnership Taxation.
C-Corporation (Form 1120)
Typical range: $1,500-$4,000+
C-Corporations file Form 1120 and face different rules than pass-through entities. While they don’t issue K-1s, they have their own complexity factors including estimated tax requirements and potential double taxation issues.
| Complexity Level | Price Range | What’s Included |
|---|---|---|
| Simple | $1,500-$2,500 | Basic operations, single state |
| Moderate | $2,500-$3,500 | Multiple states, R&D credits, stock transactions |
| Complex | $3,500-$4,000+ | International, complex credits, consolidated returns |
Factors that increase cost:
- Multi-state nexus and filing requirements
- R&D tax credit calculations can be valuable but require documentation
- Stock transactions and corporate changes add complexity
- International components trigger additional forms and compliance
- Accumulated earnings analysis and planning
For more on C-Corp taxation, see our C-Corporation Tax Guide.
What Affects Your Tax Preparation Cost
Beyond entity type, several factors influence what you’ll pay for business tax preparation.
Factor 1: Entity Complexity
Pass-through entities (S-Corps, partnerships) require K-1 preparation for every owner. This isn’t just generating a form. It’s ensuring each owner’s basis is tracked correctly, distributions are properly reported, and the K-1 reconciles to the return.
Partnerships with special allocations require additional documentation proving the allocations have substantial economic effect. Without this documentation, the IRS can reallocate income based on ownership percentages, potentially creating significant tax consequences for some partners.
Factor 2: Number of States
Each state return adds $200-$500+ depending on complexity. But it’s not just the additional return preparation.
Multi-state operations require:
- Nexus analysis to determine which states require filing
- Apportionment calculations to allocate income between states
- Different filing rules and deadlines for each state
- Composite return decisions for nonresident partners or shareholders
A Texas business with California customers may have nexus in California without realizing it. Getting this wrong means back taxes, penalties, and interest when the state eventually notices.
Factor 3: Number of Owners/Shareholders
Each K-1 requires individual preparation, but the impact goes beyond that.
Different shareholder situations add complexity:
- Shareholder loans need proper documentation and interest calculations
- Basis tracking must be maintained for each owner individually
- Distribution timing affects different owners differently
- QBI calculations depend on each owner’s personal situation
A 10-partner partnership isn’t just 5x the work of a 2-partner partnership. It’s 5x the coordination, questions, and potential for allocation issues.
Factor 4: Transaction Volume and Complexity
More transactions mean more reconciliation. But complexity matters more than volume.
Complex transactions requiring additional analysis:
- Asset sales with gain/loss calculations and depreciation recapture
- Business acquisitions with allocation of purchase price
- Shareholder/partner loans with proper documentation
- Real estate holdings with depreciation, 1031 exchange considerations, and passive loss rules
- Changes in ownership requiring basis adjustments
Factor 5: Record Quality
Clean, organized records reduce preparation time. If your preparer can import your QuickBooks file and reconcile to bank statements quickly, they can focus on analysis rather than data entry.
Poor records increase costs through:
- Time spent reconstructing transactions
- Catch-up bookkeeping that may be required
- Follow-up for missing documentation
- Increased risk of errors and needed amendments
Maintaining proper bookkeeping throughout the year is an investment that pays off at tax time.
Factor 6: Planning and Advisory
Returns that include proactive planning recommendations cost more because they deliver more value.
A basic compliance-only return files what happened. A return with planning identifies:
- What you could do differently next year
- Entity structure optimization opportunities
- Retirement contribution strategies
- Income timing possibilities
- Estimated tax adjustments
Year-round advisory relationships provide the best value because planning happens throughout the year, not just at filing time.
How CPAs Price Business Tax Preparation
Understanding how CPAs price their services helps you evaluate quotes and compare options.
Pricing Model 1: Per-Form Pricing
How it works: Set price per form type regardless of complexity.
Example: “$1,500 for any S-Corp return”
Pros:
- Easy to understand and budget
- No surprise bills at the end
Cons:
- Simple returns subsidize complex ones
- No incentive for the preparer to dig deeper
- May not include planning or advisory
Pricing Model 2: Hourly Billing
How it works: Time spent multiplied by hourly rate.
Example: “$200/hour, estimated 10-15 hours”
Typical CPA hourly rates range from $150-$400/hour depending on experience, location, and firm size.
Pros:
- You pay for actual complexity
- Accounts for unexpected issues
Cons:
- Hard to predict final cost
- May incentivize inefficiency
- Creates anxiety about asking questions
Pricing Model 3: Value-Based / Upfront Estimates
How it works: Price based on scope and expected complexity, quoted before work begins.
Example: “S-Corp with 2 shareholders, single state, standard operations: $1,800”
Pros:
- Predictable cost
- Aligns preparer and client incentives
- Accounts for both compliance and advisory value
Cons:
- Requires good scoping upfront
- May need adjustment if scope changes significantly
What SDO uses: We provide upfront estimates based on scope. You know what to expect before we begin work. If scope changes significantly during the engagement, we discuss it first.
Why Cheap Tax Preparation Can Cost More
The preparation fee isn’t your real cost. Your tax bill is.
The True Cost of Missed Deductions
The QBI deduction alone can be worth up to 20% of qualified business income. A business with $200,000 in qualifying income could be entitled to a $40,000 deduction worth $12,800 in tax savings at the 32% bracket.
Example scenario:
- Business income: $200,000
- QBI deduction (if properly calculated): $40,000
- Tax savings at 32% bracket: $12,800
- “Cheap” preparer missed it: You paid $12,800 more than necessary
- Cost of quality preparer: $1,500 more
- Net loss from “saving” on prep: $11,300
Other commonly missed opportunities:
- Section 179 and bonus depreciation timing
- S-Corp reasonable compensation optimization
- Retirement contribution maximization
- Multi-state apportionment strategies
The True Cost of Compliance Problems
Late filing penalties for partnerships and S-Corps are $220 per owner per month, up to 12 months. A 4-partner partnership that files 3 months late faces $2,640 in penalties before any tax is even calculated.
Reasonable compensation issues can be devastating. An S-Corp owner who paid $0 salary while taking $150,000 in distributions may face:
- IRS reclassification of distributions as wages
- Back payroll taxes of approximately $15,000
- Penalties and interest adding another $3,000+
State nexus problems discovered later mean back taxes, penalties, and interest from states where you should have been filing.
When to Invest More in Tax Preparation
Pay more when:
- Your entity complexity warrants specialized expertise
- You operate in multiple states requiring compliance monitoring
- You’re in a growth phase where decisions matter most
- You have audit or compliance history
- You want planning, not just filing
How to Get the Best Value from Your Tax Preparer
Regardless of what you pay, you can maximize value by being a good client.
Organize Before You Submit
- Provide clean records categorized properly
- Respond to questions promptly and completely
- Use the preparer’s document request checklist
- Don’t wait until the last minute
See our business tax preparation checklist for what you’ll need.
Ask About Planning Recommendations
Don’t just accept a completed return. Ask:
- What could I do differently next year?
- Are there deductions I’m not taking?
- Should I adjust my estimated payments?
- Are there entity structure changes to consider?
Request year-end planning meetings before December 31 when there’s still time to act.
Consider the Full Relationship
Preparation-only relationships miss the real value of working with a CPA. Tax planning saves more than preparation costs.
Year-round access to answer questions, model scenarios, and provide guidance has value beyond the return itself.
Questions to Ask About Tax Preparation Pricing
Before hiring a tax preparer, get clear answers to these questions:
- What’s included in your quote? (State returns? K-1s? Amendments?)
- How do you handle questions that come up during preparation?
- What additional fees might apply?
- Do you provide tax planning recommendations with the return?
- What happens if my situation is more complex than expected?
- How do you bill for amended returns if needed?
For more guidance on evaluating preparers, see our guide on how to choose a business tax preparer.
Getting a Quote for Your Business
When requesting a tax preparation quote, be prepared to share:
- Entity type and formation date
- Number of owners/shareholders
- States where you operate or have nexus
- Approximate revenue
- Any special circumstances (transactions, elections, changes)
- Prior year return (if available)
The more information you provide upfront, the more accurate the estimate will be.
Understanding what drives business tax preparation costs helps you evaluate quotes, ask the right questions, and make informed decisions about where to invest. The cheapest option isn’t always the most expensive, but the most expensive option isn’t always the best value either.
The right choice depends on matching your situation’s complexity to the appropriate level of expertise. For straightforward sole proprietorships, a qualified preparer may serve you well. For S-Corps, partnerships, multi-state operations, or any situation where planning matters, investing in CPA-level expertise typically pays for itself.
If you’re ready to get an estimate for your business tax preparation, share some details about your situation and we’ll provide an upfront quote with no surprises.
Frequently Asked Questions
How much does it cost to have a CPA prepare business taxes?
CPA costs for business tax preparation vary by entity type. Single-member LLCs typically cost $300-$1,500. S-Corporations range from $1,200-$3,500. Partnerships run $1,000-$5,000+. C-Corporations cost $1,500-$4,000+. The actual cost depends on complexity factors including number of owners, states, and transaction volume.
Why do S-Corp returns cost more than Schedule C?
S-Corp returns require Form 1120-S (a separate corporate return), Schedule K-1 preparation for each shareholder, reasonable compensation analysis and documentation, and shareholder basis tracking. These additional requirements add significant complexity compared to reporting business income on Schedule C.
What’s included in business tax preparation fees?
Basic fees typically include return preparation and e-filing. Additional services that may or may not be included: state returns, K-1 preparation, estimated tax calculations, and planning recommendations. Always ask what’s included before engaging a preparer.
Should I use a CPA or tax preparer for my LLC?
For single-member LLCs with simple operations, a qualified tax preparer may suffice. For multi-member LLCs, S-Corp elections, multi-state operations, or any complex situation, a CPA’s training usually justifies the additional cost through optimizations found and mistakes avoided.
How can I reduce my business tax preparation costs?
Maintain organized records throughout the year, provide complete documentation upfront, respond to preparer questions promptly, and use accounting software that integrates with tax preparation. Clean records reduce preparation time and cost.