How Much Does an S Corp Tax Return Cost?

Filing taxes is a crucial aspect of running any business. What makes S corps more complex is that they have an additional tax filing requirement (Form 1120-S). You may be wondering, “how much does an S corp tax return cost?” The amount your business pays for an S corp tax return varies based on several factors. In this post, we’ll break down the typical costs involved and what you should consider when budgeting for your S corp’s tax return.

Factors Influencing the S Corp Tax Return Cost

Complexity of the Business – This includes the number of accounts in your business’ chart of accounts, foreign transactions, capital asset and vehicle purchases, inventory valuation, number of partners, etc… The higher the complexity, the higher the cost.
Quality and Organization of Records – Well-maintained and organized financial records reduce the time your accountant needs to prepare the tax return, potentially lowering the cost. Using accounting software like QuickBooks can streamline the process and help reduce costs.
Geographic Location – The cost of tax preparation service varies by location of the provider. In major metropolitan areas with a higher cost of living, you may pay more compared to a smaller town with a lower cost of living.
Experience and Expertise of the Tax Professional – Certified Public Accountants or tax attorneys with extensive experience preparing S corp tax returns often charge higher fees than unlicensed tax preparers. With that being said, they often provide more comprehensive services or additional advice.

Typical Cost Ranges

Based on the factors mentioned above, here’s a general idea of what you might expect to pay for an S corp tax return:

Basic S Corp Tax Return: For a straightforward tax return with well-organized records, your business might pay between $500 and $2,000.
Moderately Complex Tax Return: If your S corp has a moderate level of complexity, the cost can range from $1,000 to $2,500.
Highly Complex Tax Return: For businesses with a high volume of transactions, complex financial situations, or those requiring extensive tax planning and additional services, the cost can exceed $2,500.

Our tax return filing fees currently start at $1,595 (including one state). Most individuals look at TurboTax as a less expensive alternative to a CPA or tax attorney, however, TurboTax’s fees for a prepared S corp tax return start at $1,749!

Here’s some additional examples:

WCG Inc (Colorado): starting fee is $1,500

Buckeye CPA (Ohio): starting fee is $600

MyCPACoach (Virtual): starting fee is $1,500.

The Graf Tax Co PLLC (Texas): median price is $2,200

Will Chen, CPA PLLC (Washington): price is between $1,000 – $3,000

Dark Horse CPA (virtual): starting price is $2,496

Tips for Reducing Tax Preparation Costs

Maintain Organized Records – Keeping your financial records organized throughout the year can significantly reduce the time your tax professional needs to spend preparing your return.
Use Accounting Software – Implementing accounting software can streamline your bookkeeping and make tax preparation easier.
Avoid Work or Hiring Employees in Multiple States – Most business owners are unaware that if you do business or hire employees in a new state, this often triggers an additional state tax return. Additional state returns come with additional cost.
Plan Ahead: Engaging in regular tax planning with your accountant can help you avoid last-minute surprises and potential extra charges.
Shop Around: Get quotes from multiple tax professionals to find one that offers a good balance of cost and expertise.

Conclusion

The cost of preparing an S corp tax return varies widely based on the complexity of your business and the quality of your records. While it might be tempting to choose the lowest-cost option, investing in a qualified tax professional can save you money in the long run by ensuring compliance and optimizing your tax strategy.

At S Corp Advantages, we understand the unique challenges of S corporation taxation. Our experienced team is here to help you navigate the process and ensure you get the best value for your tax preparation needs. Contact us today to learn more about our services and how we can assist you in filing your S corp’s tax return.

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About the Author

Brett Rosenstein

Founder of S Corp Advantages
Certified Public Accountant

Brett is the founder and president of S Corp Advantages where he specializes in S corporations. He helps business owners understand if an S corporation election is right for their business. He also keeps current S corps in compliance with IRS regulations.

Brett received a Bachelor of Science in Business Administration from The Ohio State University. He is also a Certified Public Accountant.

When Brett is not working, he is running, biking, spending time with his wife and daughter, or trying new pizza places around Chicago.

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