Andrew Klimishyn | January 25, 2018 at 14:54
Home > Blog > The Certified Public Accountant (CPA) Salary Range

When preparing a tax return, a half of clients calculate taxes themselves with use of the up-to-date software. Others prefer to hire an accountant or tax preparer.  Another option implies using services of the accounting firm which would cost usually a few thousand dollars for preparing taxes.

When working with clients, accountants can charge them in a few ways but the most common are service and time-based rates. The fee usually is calculated based on the time spent on a certain service. The hourly rate can be based either on the complexity of the financial situation or tax preparer’s specialization and working experience.  

The Public Accountant Services:

It is clear that CPAs whose additional education allows them to perform more complicated tasks than standard accountants do. They are not asked to sit in the office and do the bookkeepers’ job though bookkeeping is not excluded from the list. The services offered by a highest-paid professional are the following:

  • handling payroll;
  • recordkeeping;
  • managing accounts;
  • billing clients;
  • preparing a tax return, tax liability, report;
  • planning taxes;
  • producing monthly, quarterly, and annual financial statements;
  • conducting an audit;
  • consulting services.

When performing large-scale operations such as audit, calculating taxes or preparing a financial statement, CPAs use accounting software in order to save time. One of the most often used products for bookkeeping and paperwork is QuickBooks developed by Intuit, a leader in small to mid-sized business accounting software. When hiring a professional that is using it, you get your data processed automatically, quickly and accurately.

If you own a few million dollars business, it is more profitable to hire a CPA who uses QuickBooks as it allows saving money rather than a CPA firm. Individuals who start a business are advised to find a bookkeeper. Alternatively, you can opt to hire a freelance accountant that will handle all the financial issues if there arise any.

The CPA Tax Preparation Fees

One of the tasks most often ensured to the Certified Public Accountants is preparing taxes. At the end of the fiscal year, individuals and business owners are concerned with finding a pro offering his services at as many low rates as possible.
Alter every fiscal year the National Society of Accountants collects data about the fees on tax preparation. They are flat but some accountants still charge their clients an hourly rate. So, as of 2017, tax preparation fees CPAs were charging the customers were the following:

 

Tax documentation

CPA  tax preparation fee

Form 1040 (with no itemized deductions) and a state tax return

$176

Form 1040 (with no itemized deductions), a state tax return and Schedule A (itemized deductions)

$273

Form 1040, Schedule A (itemized deductions), a Schedule C (profit or loss from business) and a state tax return

$457

Schedule C

$184

Schedule D (capital profit and loss)

$124

Schedule E (income from rental real estate)

$135


How Much Does a Public Accountant Make?

The IRS (The Internal Revenue Service) is revealing some data from the National Society of Accountants for a deeper understanding of how much the CPA costs.

As of January 2018, the hourly CPA rate comes in around $30 per hour, if more precisely, $29.70. This is a starting salary paid to the specialists who begin to work on this position. This figure can be even lower, near $20. The data posted on Payscale show that the median pay is about $24. When comparing to a general accountant starting median pay, which is $22.76 per hour, it is not much higher. Though CPAs are considered more experienced specialists, so they usually command their clients a much higher rate. The clients are expected to spend from $30 to $300 per hour depending on the services provided by the professional.

 

Over the last decade, the CPA fees have slightly increased. Comparing to 2012, an average pay per hour became nearly 7 percent higher.

As for an annual rate, it can depend on a variety of factors. According to data obtained from departments at companies of all sizes and industries, a median annual CPA wage can reach up to $50 thous. with a range usually between $40 and $60 thous. This though is considered a low pay as CPAs usually make up to $100 thous. per year. The Bureau of Labor Statistics (BLS) has also tracked the upper-level salaries for accountants. The maximum tracked wages for public accountants reach $500 thous. or more.  

Also, there is a huge difference between how much CPA owners make comparing to non-CPA owners. If CPA owns a firm, he can serve to big companies charging much higher price than an individual specialist. The company with an annual gross less than $1 million is asked to pay nearly $170 per hour. This figure can increase up to $300 for firms with a profit $20 million or more per year. CPA owners make more than non-CPA owners.

Small companies that hire the CPA firms are charged an hourly rate between $30 and $50 per hour. The tasks to be conducted are less complex and time-consuming compared to big-sized companies but it is still more convenient to ensure them to the CPA firm instead of an individual accountant or a CPA. The clients can outsource some tasks such as bookkeeping and payroll. When outsourced, CPA will require a monthly fee minimum $100/month. Outsourcing allows to you to communicate with a CPA whenever you need without being charged.

The Factors Influencing the CPA Fees

One should take into account that the fee for CPA services depends on a few factors, for example, location with higher charges in metropolitan areas. When speaking about the highest-paying regions, there could be listed such places as DC, New York, New Jersey, Maryland, and California. The median hourly pay would range approx. from $35 to $42. If you need to ask for a help from a specialist from the far located state, the pay is rising significantly.

It is recommended to ask for an estimate of what the CPA services might cost before the professional from a neighboring or remoted state will start to do your taxes. The thing is you probably will not get information about the price until you meet with the professional to go through your tax situation.

The charges for preparing taxes can be also based on the tax situation. The more it is complicated, the higher fee is expected to be charged. If books of records are poorly organized or there is a lack of any financial data, tax preparer would possibly allot more time. Respectively, clients are charged extra dollars but it is still wiser to hire a person with years of experience than a newcomer in the field, especially, if tax situation is out of the norm.

As you might conclude, an hourly rate may vary based on the CPA working experience. The entry-level hourly rate for an accountant with working experience less than 1 is, as it was said above, $20. When the CPA works in the field of accounting 5 to 10 years, he is expected to earn approx. $27 per hour. As you might notice, pay is increased quite slowly and auditor with a 20 years experience charges on average  $40 per hour. The thing is CPAs are usually asked to carry out audits and other complicated tasks that take a lot of time.

How Does Getting a CPA License Impact on the Salary?

There exist a lot of accounting designations but public accountants is one of the most prestigious. A CPA earns more than his non-credentialed peers as he possesses a significant advantage, namely, a license assigned by AICPA (the American Institute of Certified Public Accountants). The CPAs work is highly valued for their additional education and working experience. To become a CPA one is obliged to have 150 credit hours schooling, pass a CPA examination, and obtain 2 years of working experience in a public accounting firm. Each requirement is mandatory. Also, a CPA is obliged to keep up with every tax regulation issued by the government and continue education after initial licensure.

Conclusion

The CPAs are professionals in accounting who perform well-paid job meeting rigorous requirements. There exist a variety of ways to calculate CPA  fees while the most convenient is by hourly rate. The salary of public accountants differs from the bookkeeper or general accountant wages and depends on such factors as years of working experience, the complexity of tasks conducted, location and other.

 

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