How do your tax prep fees stack up?

Tax preparation fees should reflect the complexity of the return, the time required, your firm’s costs, and the value of your expertise. They can also help set expectations with clients before the busy season begins.

Key takeaways

• Tax professionals use several pricing models, including per-form, hourly, fixed-fee, value-based, and bundled pricing.
• Fee reviews can help firms account for higher costs, changing client needs, and added service complexity.
• Disorganized or late client information can create extra work and may justify higher fees.
• Bundled services can help spread client work across the year.
• Pricing should support both profitability and a clear client experience.

Tax professionals use a variety of different methods to set prices, including per-item, per-form, or per-hour rates. For example, a practitioner might charge any of the following:

• A set fee for each tax form or schedule.
• A minimum fee, plus an amount based on the complexity of the client’s return.
• A fee based on the subjective value of the tax preparation service.
• An hourly rate for time spent preparing the tax return.
• A set fee for each item of data.
• A monthly, quarterly, or annual fee that includes tax return preparation, along with other services that could include tax planning and advisory work, quarterly estimates, bookkeeping, or payroll.

Whether you use one of these methods, a combination of methods, or some other approach to setting your fees, it’s a good idea to conduct an annual review in advance of tax return season to ensure you are not short-changing yourself and your practice. Your fee structure should factor in your cost, plus a reasonable profit margin. On the other hand, you’ll want to make sure you are not charging more than the market will bear.

While not definitive, comparative data on what other tax professionals are charging can be a useful guideline for assessing your fee structure. For example, the November 2023 Tax Pro Forms Pricing Study by Intuit Accountants of more than 200 accountants provides some insight into the fees charged by tax professionals for various tax preparation services.

Tax preparation fees national averages

The Intuit Accountant study reports the following national averages for Form 1040 income tax returns from those who charge for these forms and scenarios:

2 W-2s and a state return	$238
2 W-2s, a Schedule D, 3 1098s, 1 1099 Composite, the Child Tax Credit, and 2 state returns	$350
1 W-2, 8 1099-INT and 1099-DIV forms, 1 1098, a Schedule D, Schedule E, 2 1099-NECs, and 1 state return	$537

When do tax preparers tell their clients how much their return will cost?

Accountants appear to have pricing power; they often don’t tell their clients exactly how much they’ll owe until the return is completed, likely due in part to the fact that they don’t know how long a return will take or how responsive clients will be to follow up questions until the work is totally done.

For example, the Intuit study found that the most common approach is for accountants to not give an estimate or minimum price up front, but rather to bill their clients the appropriate amount once the work on the return is done.

The second most common approach is to give a base or minimum price, and then provide exact pricing once the return is completed. The third most popular approach is to give an estimated range up front, and the fourth is to provide a specific estimate up front.

How should tax preparers handle delinquent or disorganized clients?

It is not uncommon for preparers to charge a higher fee to clients who submit their return paperwork right before the filing deadline or who submit a jumbled mess. A 2020-2021 Income and Fees Survey from the National Society of Accountants study found that 75.1 percent of preparers increase their fees by an average of $145.14 for disorganized or incomplete paperwork to complete a return for a sole proprietor.

Intuit Rate Survey

The most recent Intuit® Rate Survey conducted was in 2021. As in past years, the 2021 survey asked a variety of questions related to firm demographics, methods used to bill clients for different types of services, and of course, how much practitioners are charging for these services.

How do tax preparers collect fees?

The survey asked practitioners how they billed their clients for various service offerings based on the following definitions:

• Hourly billing based on the hours worked.
• Value pricing based on the maximum amount a given client is willing to pay for a service, typically set before the work begins.
• Value billing usually marking up or more frequently marking down the invoice to the client after the work has been performed.
• Fixed fees, with the fee often determined based on estimated hours (or cost) to complete the work.

Intuit survey average hourly rates

It is important to note that only 48% of survey respondents were willing to provide their average hourly rate. Based on the data available, however, it appeared as though tax practitioners gave ourselves a raise since the last survey was done in 2019. The standard average hourly rates increased by 8.6% from $69 (2019) to $75 (2021).

Survey data also indicated that more practitioners in 2021 (35%) were charging the same hourly rate across the board for all services. This could suggest an effort to streamline billing rates or that services are being bundled.

How pricing can help reduce peak-season bottlenecks

How you set your pricing can also shape client behavior.

When clients submit incomplete or last-minute information, staff may need more time for follow-up, review, and corrections. A firm charging more for that extra work can help set clearer expectations and encourage clients to provide complete information earlier.

Firms can also use base fees, minimum fees, or bundled service packages to improve planning before tax season. These pricing models can make it easier to estimate workload, schedule staff, and reduce deadline-driven bottlenecks.

Set your fees accordingly

Every practice is different, geographic areas of the country vary, and a number of other socioeconomic and demographic conditions exist. That’s why it’s important that you are comfortable setting your fees accordingly; in other words, set them based on your situation and what your clients are willing to pay without constantly questioning your fees.

What do you charge? We’d love to hear from you by writing in a comment below.

Frequently asked questions

What pricing models do tax professionals commonly use?

Tax professionals use several approaches, including per-form fees, hourly rates, fixed fees, value-based pricing, and bundled service packages that may include tax planning, bookkeeping, or payroll.

What are the national average fees for Form 1040 tax preparation?

According to a 2023 Intuit Accountants study, national averages range from $238 for a simple return with two W-2s and a state filing to $537 for more complex returns involving multiple income forms and schedules.

When should tax preparers communicate their fees to clients?

Approaches vary widely. The most common practice is to bill clients after the return is completed, though some firms provide a base or minimum price upfront and finalize the amount once the work is done.

Is it appropriate to charge more for disorganized or late client paperwork?

Yes, and it is a common practice. A National Society of Accountants survey found that 75.1% of preparers increase their fees by an average of $145.14 for disorganized or incomplete paperwork.

What was the average hourly rate for tax preparers in 2021?

Based on the 2021 Intuit Rate Survey, the average hourly rate was $75, up 8.6% from $69 in 2019. Only 48% of survey respondents were willing to share their hourly rate.

How often should a tax firm review its fee structure?

Firms should conduct a fee review at least once a year before tax season to account for rising costs, changing client needs, and added service complexity.

How can pricing help reduce tax season bottlenecks?

Charging higher fees for late or incomplete information encourages clients to submit organized documents earlier, which helps firms better estimate workload, schedule staff, and reduce deadline-driven pressure.

How should a firm determine the right fee level for its market?

Fees should reflect your firm’s costs, a reasonable profit margin, local market conditions, and what clients are willing to pay. Comparative data like industry surveys can serve as a useful reference point, but your specific situation should guide the final decision.

Editor’s note: This article was updated with new content on Dec. 7, 2020, Jan. 27, 2022, Feb. 15, 2024, and July 28, 2026. This article is also available in Spanish.