What Are Typical CPA Fees?

Tax, SDIRAs & Cost Segregation
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What Are Typical CPA Fees?

Jake ThompsonPro Member
Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes

I'm curious what people are seeing as typical fees for CPA's? I recently listened to the podcast with Brandon Hall (19...8?) and was pretty impressed with his knowledge. After looking on his website his fee for a basic plan is $150/mo. To me,that seems pretty steep, however I have nothing to compare it to. I want to minimize my taxes by working with a good real estate cpa, but I just want to make sure I'm not getting an overpriced service. A little background on my portfolio, my wife and I have one duplex in California, but file personal taxes in Oregon. Thanks!

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Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y

Brandon is doing things differently than most... but it makes a lot of sense. 

I work for a firm that's a financial advisory and CPA firm. 

Our finance side bills a flat rate the way Brandon does- for the same reason. People want to discuss their investments as they happen, they want to be able to ask questions, run scenarios, ect ...without getting invoiced for your time each and every time they have an idea. 

Now think about real estate....kind of relates more to a financial investment than most businesses. You want to be able to ask questions, run models, and talk to your CPA about stuff before you make HUGE decisions. 

If you own a petstore- you're selling birds and puppies and nothing really changes. Paying $800 once a year to havea  tax return filed is kind of all you need. 

If you have one rental and that's all you plan to do....pay $500 once a year and call it a day. 

If you want growth, advising, and extra services. You'll pay a little more but you get a lot more 

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  • Account Closed
    Investor · Buffalo, NY · Member since 2016 · 668 posts · 209 votes
    9y

    Shop around locally. You might just need a quarterly visit with a tax accountant who's experienced with military family concerns. Best of luck with your investments and thanks for your service.

    1Reply
  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    9y

    Hi @Jake Thompson

    You can certainly find lower cost CPAs. My lowest monthly plan (the one you cited in your post) includes three phone calls and unlimited email support. I'm not just pricing in tax prep.

    There are plenty of CPAs who will provide you with a price per tax return and have an hourly rate for phone calls/meetings. In my experience, clients tend to not want to call and be billed by the hour, however they need to touch base several time throughout the year with their CPA, hence the development of my model :)

    You should join a local REIA and ask who the members are using. You'll likely get great referrals there.

    4Reply
  • Jake ThompsonPro Member
    OP
    Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
    9y

    Thanks for the info Brandon and Michael. To be honest I don't know that I really even understand my tax needs fully so I don't know what services I would need. I definitely think I should be consulting a cpa for taxes this year rather than turbo tax. However I'm not sure if I should be paying for a cpa to help build a tax strategy for me. I think eventually that is something I will need, but with the one property I'm not entirely sure. I will do more research before deciding.

    0Reply
  • Scott Vance
    Investor · Fort Bragg, NC · Member since 2016 · 59 posts · 20 votes
    9y

    @Jake Thompson  I am retired from the Army.  I wish I had paid a little money through the years to have a tax expert and financial expert to advise me on ways to save money, especially when I had only a little.  For the fees I would have paid I would have made more by following good advice and had many less sleepless nights.  

    3Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    Brandon is doing things differently than most... but it makes a lot of sense. 

    I work for a firm that's a financial advisory and CPA firm. 

    Our finance side bills a flat rate the way Brandon does- for the same reason. People want to discuss their investments as they happen, they want to be able to ask questions, run scenarios, ect ...without getting invoiced for your time each and every time they have an idea. 

    Now think about real estate....kind of relates more to a financial investment than most businesses. You want to be able to ask questions, run models, and talk to your CPA about stuff before you make HUGE decisions. 

    If you own a petstore- you're selling birds and puppies and nothing really changes. Paying $800 once a year to havea  tax return filed is kind of all you need. 

    If you have one rental and that's all you plan to do....pay $500 once a year and call it a day. 

    If you want growth, advising, and extra services. You'll pay a little more but you get a lot more 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
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    7Reply
  • Jake ThompsonPro Member
    OP
    Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
    9y

    Thanks Scott, great advice! I definitely don't want to be "stingy" or "cheap" and miss out on something important I should be doing/paying for. I just want to make sure I'm paying a reasonable fee.

    0Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    I use a CPA for State & Fed filings where I perform the monthly accounting and provide the PnL and Balance Sheet data for inputs.  April filing costs about $300 one time fee per year.

    Costs are per form submitted which seems fair to me.

    I have never signed a retainer agreement.

    0Reply
  • Jake ThompsonPro Member
    OP
    Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
    9y

    Thanks Natalie, I appreciate your advice on several of my posts as well as others I have been watching. So it sounds like $1800/year is a reasonable charge for an experienced real estate cpa to file returns and give ongoing advice. Especially since I am planning on growing my portfolio. 

    1Reply
  • Jana CainPro Member
    Enrolled Agent · Richmond, CA · Member since 2016 · 225 posts · 148 votes
    9y

    @Jake Thompson I'm not so sure there are "typical" fees, as pros (and this goes for tax, law, etc) price based on a variety of variables. I've heard everything from "I charge $x because I can" to "This is the going rate for this area" and everything in between. A quick web search can give you information about national (and sometimes geographic) averages for tax prep, but there's not much public information about non-tax prep services. As the others have mentioned, network with folks to ask around. As a starting point, you know the questions you have right now, so you can ask a professional "how much do you charge for these questions I have right now?"and go from there. For my business, I have to yet to charge for anything other than actual tax prep, or formal tax planning, but that's because I have a very small client base (that is all from referral) and they just don't have ongoing questions. For all of them, we text/email as needed, and I don't feel compelled to charge for simple (read:easy) responses. I always charge for deliverables, though (e.g. if one of my clients asked for an analysis of some sort), but I tell the client up front what it will cost.

    My "personal" client base is small, though, because I also assist a CPA with his practice. He typically charges a retainer, so any consults, analyses, etc are just charged against the retainer. When the retainer is used up and they still need ongoing assistance, he bills them for another retainer. 

    So that's just two examples of how things could be done. I hope this helps!

    0Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y
    Originally posted by @Jake Thompson:

    I'm curious what people are seeing as typical fees for CPA's? I recently listened to the podcast with Brandon Hall (19...8?) and was pretty impressed with his knowledge. After looking on his website his fee for a basic plan is $150/mo. To me,that seems pretty steep, however I have nothing to compare it to. I want to minimize my taxes by working with a good real estate cpa, but I just want to make sure I'm not getting an overpriced service. A little background on my portfolio, my wife and I have one duplex in California, but file personal taxes in Oregon. Thanks!

     Just this tax return alone for 2 states and federal would end up being around $700 ish at my current firm- it would have been $1,200ish at the l firm I was with. 

    That's just compliance filing and some emails and what not. Any strategy, planning, advising meetings would be hourly on top of that. 

    People want the "best" CPA around and often get quoted at manager or partner prices. That's going to be $300ish an hour vs my $100 an hour. 

    At the end of the day CPA firms are SUPER competitive from an employment standpoint. So younger associates are going to bust their *** on your return...PLUS it's still going to be reviewed by one of those managers. So just keep that in mind too- that you don't necessarily NEED the "best" based on experience, years, ect- CPA at a firm doing your return. 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    1Reply
  • Jake ThompsonPro Member
    OP
    Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
    9y

    Great feedback on here, I appreciate it! I have no doubt that a good CPA is worth it. Now I just have to figure out what exactly I want, whether it's annual tax returns or planning as well. Thanks everyone! 

    0Reply
  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    9y

    @Jake Thompson for reference, my actual return pricing is around $800 in the Basic Plan model.

    Honestly, when a new client calls me and they have a single property portfolio, I tell them I may not be the best fit. However, if they plan to add a few throughout the next year, my costs become rather reasonable. 

    Here's what you should do Jacob - call up a few different CPA firms who operate on different models. Ask questions about how the relationship will look. Get a really solid feeling about what it will be like to work with that CPA. Then make your decision. You may find an amazing CPA who bills by the hour and you may be perfectly okay with it. Folks like different things :)

    1Reply
  • Jake ThompsonPro Member
    OP
    Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
    9y

    Thanks Brandon, I'll do that with your firm as well as a couple of others! I do plan on adding a 4 plex in 2017 and more in the years to come.

    2Reply
  • Seth Macomber
    Accountant · Lihue, HI · Member since 2016 · 52 posts · 24 votes
    9y

    Typical CPA costs vary. I work in a small-medium sized CPA firm and costs can range from $199-699$ per month (for Compilation, Review, and/or Payroll) -- not including tax prep fees. Just like @Brandon Hall mentioned, we also turn away potential clients on certain circumstances.

    In my humble opinion, I would look for the right CPA for you, rather than the cheapest. If cost is really tight, you could try and hire a bookkeeper, and take your end of year P/L to H&R Block.

    0Reply
  • Michael Plactere
    Accountant · East Norwich, NY · Member since 2016 · 5 posts · 0 votes
    9y

    Due to the size of your engagement you need to look at small CPA firms or hook up with at CPA who has his or her own practice. Most small-mid sized CPA firms are going to charge you an arm and a leg. Generally speaking larger CPA firms have a larger sized client base and can charge significantly more for their services. These firms don't want to deal with the hassle of a little client and wont quote you fairly.

    I used to work at a small firm and they probably would have charged $175-200 a month for this type of work. I usually charge $1,500 per tax return assuming that the client is organized and does their own bookkeeping. If not, then this rate is obviously greater. I would suggest finding a CPA who has his or her own practice and has experience in multi-family real estate.

    1Reply
  • Franklin Romine
    Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
    9y

    @Jake Thompson

    I pay about $3,000 per year for a CPA. This is for my personal and LLC tax return, we have +40 doors. This expense doesn't include book keeping or the tax return for another LLC I own with a business partner we use to flip properties through.

    I believe in paying a premium for a high quality CPA.  I haven't paid taxes for years....so my CPA expense is minimal.  

    I also believe in not calling and bugging a CPA unless there is a serious need.  I'm not the type of person that takes all the free stuff in a hotel room.


    Franklin

    Franklin

    4Reply
  • Joe White
    Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
    9y

    Shouldn't a CPA be local? Your state and even your city?

    0Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Joe White It's 2016 man. We've got the internet. Almost all CPA firms are paperless and do everything digitally. There's no reason fora  local firm. 

    City laws don't really come into play 

    State laws do but most of us already have clients across the county- and if not, we do research on that state's requirements. 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    3Reply
  • Joe White
    Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
    9y

    @Natalie Kolodij - Ha!
    But cities like Philadelphia have their own special tax situations - Not a consideration?

    0Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    A CPA is literally required to take educational courses annually to keep their license. It's part of the deal is to keep on on things.  They'd put in the research if someone on the team doesn't already know/ hasn't already encountered it. 

    What special tax situation does Philly have? 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    9y
    Originally posted by @Natalie Kolodij:

    A CPA is literally required to take educational courses annually to keep their license. It's part of the deal is to keep on on things.  They'd put in the research if someone on the team doesn't already know/ hasn't already encountered it. 

    What special tax situation does Philly have? 

     A CPA is not required to take classes in tax though. Make sure the CPA is educating themselves in Federal Tax Law.

    [email protected]224-381-2660
    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    9y
    Originally posted by @Joe White:

    @Natalie Kolodij - Ha!
    But cities like Philadelphia have their own special tax situations - Not a consideration?

     Yes, it is a consideration; however, for the few states that have local tax laws such as PA, MI and OH, we look at it on a case by case basis. Most are quite straight forward though from Federal Tax Law.

    [email protected]224-381-2660
    0Reply
  • Joe White
    Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
    9y

    @Steven Hamilton II - Good to know!

    0Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y
    Originally posted by @Steven Hamilton II:
    Originally posted by @Natalie Kolodij:

    A CPA is literally required to take educational courses annually to keep their license. It's part of the deal is to keep on on things.  They'd put in the research if someone on the team doesn't already know/ hasn't already encountered it. 

    What special tax situation does Philly have? 

     A CPA is not required to take classes in tax though. Make sure the CPA is educating themselves in Federal Tax Law.

     ...Make sure you confirm your EA is keeping current on this as well. Since their licencing requirement doesn't require annual continuing education. 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    9y

    @Natalie Kolodij WRONG.  All EAs are required to take 72 hours of CE over a three year period, each year they are required to do a minimum of 16 hours and 2 of those hours MUST be in Ethics.

    I don't publish my rates out right; however, I have two different types of engagements. Monthly such as @Brandon Hall was discussing and I have clients who engage me for tax prep only and they have different charges.  I stay very competitive. I'd rather have a limited number of clients that I can serve well rather than 

    [email protected]224-381-2660
    0Reply
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