Average Fees for Tax Advisors in 2024

Tax advisors, and other tax professionals, offer services from preparing and filing annual tax returns to comprehensive tax strategies that help minimize taxes and preserve wealth over time. Working with the right tax advisor can prove to be a valuable relationship, but understanding the costs associated with tax services can be complex. In this guide, we’ll explore the average fees of tax advisors in the US for 2024.

Table of Contents

1. Understanding Financial Advisor Fee Structures
2. Average Financial Advisor Fees in 2024
3. How to Evaluate a Financial Advisor
4. Comparing Different Types of Professional Certifications for Financial Advisors
5. Financial Advisor FAQs

Understanding Tax Advisor Fee Structures

Tax advisors use various types of fee structures, primarily driven by the complexity of the services provided.

The three primary fee structures are:

1. Hourly fees: An hourly rate for the tax advisor’s various services. Some tax advisors may have different hourly rates for different types of services based on client type and complexity.
2. Retainer or subscription fees: For ongoing advisory services, some tax advisors might charge a monthly, quarterly, or annual retainer fee. This fee can include consulting around specific issues or all-inclusive packages for outsourcing accounting and tax services.
3. Fixed per-service fees: Some tax advisors charge a set fee for individual services that allows for predictable but flexible billing based on the number and complexity of services. This enables advisors to set minimum fees for clients and add on fees as more services are needed. 

Average Tax Advisor Fees in 2024

Understanding the common tax planning and preparation fees can guide you in making informed decisions when engaging with tax professionals. Below, we’ll break down common examples of the different types of fees that tax advisors charge in 2024.

*Costs can vary based on the complexity and scope of services provided. Therefore, costs can be higher or lower than what is reflected in this chart. The ranges provided are related to the cost charged by the Tax Advisor and may not incorporate additional expenses associated with implementing tax advice such as forming an estate or investing transactions.

These average costs should give you an idea of the acceptable fee ranges for certain tax advisory services. Keep in mind that fees may vary widely depending on the complexity of your tax situation.

Retainer fees

Retainer fees involve paying a tax advisor a recurring fee for a potentially wide range of services over a specified period, such as monthly, quarterly, or annually. CPAs and tax attorneys offer retainer services ranging from around $1,500 to $10,000 or more per month. The costs are highly dependent on the complexity of the services. Retainer packages might include ongoing tax preparation services, tax consulting, quarterly tax filings, and proactive tax planning to optimize a client’s financial position. These arrangements may be best for high-net-worth individual clients or business owners needing year-round tax optimization or accounting services.

Hourly fees

Fixed fees are common for specific services that tax advisors consistently offer. For example, a CPA might charge a flat fee per tax form or schedule filed, ranging from $40 to $1,300, depending on the form’s complexity. Tax professionals also commonly offer fixed fees for annual tax preparation services, with prices varying from $200 to $5,000 per return. This fee can fluctuate based on the tax situation, ranging from basic tax filing to the inclusion of multiple income streams, deductions, and credits. CPAs and EAs may charge extra for services like organizing disorganized records, expediting returns, or filing extensions, with fees typically ranging between $50 and $200.

Fixed per-service fees

Fixed fees are common for specific services that tax advisors consistently offer. For example, a CPA might charge a flat fee per tax form or schedule filed, which may cost anywhere from $250 to $1,500 or more depending on the level of complexity. Tax professionals also commonly offer fixed fees for annual tax preparation services, with prices varying from $250 to $3,000 or more per return. This fee can fluctuate based on the tax situation, ranging from basic tax filing to the inclusion of multiple income streams, deductions, and credits. 

How to Evaluate a Tax Advisor

Here are some essential points to consider when evaluating a tax advisor:

1. Check their credentials: Depending on the type of tax advisor you need, your advisor should have one or more of the following credentials: an active CPA license, a passing score on the IRS Special Enrollment Exam, or a law degree (JD) often with a Master of Laws (LLM) in Taxation. Additionally, all tax advisors will be required to have ongoing education and hold a PTIN if they prepare tax returns.
2. Ask lots of questions: Experience in tax planning, most importantly in the specific areas of expertise that align with your needs, is crucial to working on your behalf. Ask about the types of clients CPAs, EAs, and tax attorneys have worked with in the past.
3. Understand their fee structure: Ask the Confirm advisor about their fee structure before engaging with them for services. Some fees may be determined beforehand, while others may not be known until the advisor begins work and fully understands the complexity.
4. Check their reputation: Look for online reviews, ask for client references, and check if they have any disciplinary actions through relevant state boards or the IRS Office of Professional Responsibility for Enrolled Agents.
5. Consider their working style: Consider whether you prefer a tax advisor you can meet with in person or a firm that works remotely. Additionally, think about how you prefer to communicate and to what degree the technological tools of the firm are important to you.

Comparing Different Types of Professional Designations for Tax Advisors

Selecting a tax advisor who meets your needs and you can trust is crucial. There are three primary types of tax advisors, each with varying certifications:

Certified Public Accountant (CPA)

The standard background of a CPA includes earning a bachelor’s degree, completing 150 hours of education credit, and passing the Uniform Certified Public Accountant Examination, administered by the American Institute of Certified Public Accountants (AICPA). CPAs are licensed by state boards of accountancy in the state where they practice with many states requiring an ethics exam, ensuring that CPAs are trained to handle ethical situations throughout their career. Additionally, CPAs must meet the continuing education standards in their state.

Enrolled Agent (EA)

EAs must pass the IRS’s Special Enrollment Examination (SEE), an exam covering a wide array of tax topics, including tax preparation for individuals and businesses, client representation, and tax practice and procedures. EAs must also obtain 72 hours of continuing education every three years with a minimum of 16 hours per year including ethics training. The National Association of Enrolled Agents (NAEA) is the leading professional organization providing continuing education for EAs.

Tax Attorneys

A law degree is required to practice tax law, but many tax attorneys also pursue an optional LLM, or Legum Magister degree, in taxation to enhance their expertise in the subject. Tax attorneys can be affiliated with bar associations at the state and national levels, such as the American Bar Association (ABA). Many states require continuing legal education to remain current on tax law.

Tax Advisor FAQs

1. What factors impact the cost of your tax advisory services?

The cost of tax advisory services can vary significantly based on several key factors:

• Advisor’s credentials/expertise: Highly credentialed professionals like CPAs or tax attorneys may charge more due to their specific training and expertise that many have spent years obtaining.
• Organization of your tax documents: Well-organized financial records can reduce the time a tax advisor needs to spend on your situation, potentially lowering the cost. If your files are disorganized, your tax advisor may add fees to account for the additional work.
• The complexity of your situation: More complex tax situations, such as tax strategies for business owners or individuals with multiple income sources, can increase fees.
• Time of year: Seeking advice during the busy tax season can be more expensive than during off-peak times given a tax advisor will likely have to work extra hours or during non-business hours to handle your needs.

2. Do you need a tax advisor?

Whether you need a tax advisor depends on several personal factors:

• Complexity of your financial situation: If you have a complex scenario, such as tax questions for equity compensation, large investments, crypto investments, business ownership, or self-employment, you might benefit from professional tax preparation services and tax advice.
• Your time and expertise: If you have a complex situation and lack either the time or expertise to handle your taxes yourself, a tax advisor can take the burden off of you, applying their expertise to provide advice aligned with your goals.

3. Should you work with a CPA near you, or an online CPA?

The choice between a local CPA and an online CPA comes down to personal preference with the following considerations:

• In-Person vs. remote meetings: Some individuals prefer face-to-face interactions and may choose a local CPA for personal meetings. Others might prioritize convenience and are comfortable working with an online CPA.
• Balance personal relationships and technology: Local advisors can offer a more personal relationship, while digital firms often provide advanced technology tools and a modern, streamlined experience.
• Availability of expertise: Depending on where you live, being open to working with a remote tax advisor can open up the field of expertise available to you. If you have a highly complex situation, you may be able to find a more qualified tax advisor in another state.

4. Do you need a tax advisor who specializes in crypto?

Given the evolving and complex nature of crypto taxation, a specialized tax advisor can be helpful, keeping the following in mind:

• Complexity of crypto taxes: Crypto investments require careful tracking of gains, losses, and transactions, which can be more manual and complicated than traditional investments.
• Specialized knowledge and tools: Advisors who specialize in crypto are equipped with the knowledge and tools necessary to navigate crypto taxation, making them particularly valuable for individuals with large amounts of crypto transactions or those who have not reported crypto activities in prior years.

5. What’s the difference between a tax advisor and a tax preparer?

What distinguishes a tax advisor, often called a tax consultant, from working with a credentialed or non-credentialed tax preparer comes down to the style and value of the relationship:

• Comprehensive advice: A tax advisor’s ability to provide holistic advice on tax strategy to minimize tax liabilities for their clients is a key differentiator compared to a tax preparer.
• Ongoing relationship: Tax advisors commonly engage with clients for months to years, creating an ongoing relationship to provide their clients value. Contrast this with tax preparers who commonly work with their clients once yearly to file tax returns, often only working with a client one time.

Harness Can Help You Find the Right Tax Advisor

If you need help navigating tax questions around equity compensation, business ownership, self-employment, or any other unique tax situation, Harness can match you with a tax advisor who can provide clarity around the complex landscape of tax laws and help you target your goal of reducing tax liabilities.

The right tax advisor will partner with you to understand your situation and optimize your tax strategy. From comprehensive planning to tax preparation, we’ll connect you with a tax advisor who has the experience to meet your specific needs. Get started with Harness today.

Tax related services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness”. Harness Wealth Advisers LLC is a paid promoter, internet registered investment adviser. This article should not be considered tax or legal advice and is provided for informational purposes only. Please consult a tax and/or legal professional for advice specific to your individual circumstances.