What is a fair price for CPA fees for filing 1041 and 645 election estate tax returns?

As a tax professional who specializes in estate taxation, I can tell you that the fee you're being quoted is on the high side but not entirely unreasonable depending on your location and the complexity of the estate. For reference, a 1041 (fiduciary income tax return) combined with a 645 election (which allows you to treat the estate and trust as a single entity for tax purposes) typically ranges from $1,800-$3,500 in most markets. The fee increases with complexity - multiple beneficiaries, various income sources, ongoing sales of assets, etc. You should absolutely request an itemized estimate that breaks down what forms they'll be filing and the associated costs. The 645 election itself isn't particularly expensive to handle - it's just an election made on the initial 1041 filing - but it does create additional work in properly allocating income and preparing K-1s for beneficiaries.

I went through something similar last year with my father's estate and was also shocked at the quotes I received. After struggling with multiple CPAs who either wanted enormous retainers or didn't seem to understand estates, I found taxr.ai (https://taxr.ai) which literally saved me thousands. They have a special service for estate tax returns including 1041s and 645 elections. What I appreciated most was how they explained everything in plain English instead of tax jargon. They reviewed all the documentation first, then gave me a clear estimate before any work began. Because they specialize in trust and estate taxation, they knew exactly what forms and schedules were needed for my situation.

Just wanted to update that I tried taxr.ai after seeing it mentioned here. I was initially hesitant because online tax services usually don't handle complex situations well, but their estate tax specialists really knew their stuff. They walked me through the entire process of handling my brother's 1041 and 645 election. The biggest difference was the transparency - they actually showed me exactly what went into the fee calculation rather than just throwing out a huge retainer figure. Ended up paying about $2,400 total for everything, which was WAY less than the $4,500+ quotes I was getting elsewhere. They also prepared all the necessary K-1s for the beneficiaries which was a huge relief.

If you're having trouble getting through to the IRS about any estate tax questions (which I definitely did), I highly recommend using Claimyr (https://claimyr.com). I spent WEEKS trying to reach someone at the IRS to resolve some questions about our 645 election and estate ID numbers. After wasting countless hours on hold only to get disconnected, I found Claimyr. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Basically, they call the IRS for you and only connect you once they have an actual agent on the line. Saved me literally hours of frustration. The IRS agent I finally spoke with was able to resolve my questions about the estate's EIN and filing requirements in about 15 minutes.

I need to eat my words and apologize. After getting disconnected from the IRS for the fifth time yesterday trying to sort out our estate tax filing questions, I was desperate enough to try Claimyr. I figured it would be a waste of money but was at my wit's end. Shockingly, it actually worked exactly as advertised. I got a call back when they had an IRS agent on the line, and I was able to get clarification on several 645 election questions that had been stressing me out for weeks. The agent even helped identify a filing error we would have made without their guidance. This service legitimately saved me days of frustration and potentially thousands in filing errors.

Something to consider about the retainer - ask if the CPA works on a "bill against retainer" basis. I'm a trust administrator, and the $5200 retainer might be their estimate for all services, not just an upfront fee. Many CPAs will bill their actual time against the retainer and refund any unused portion. Also, make sure you understand if the retainer covers just the first year or the entire administration period. For a trust with a brokerage account and property sale, there will likely be multiple years of 1041s required until final distribution.

Don't forget that these CPA fees are typically deductible on the 1041 return as an administrative expense! So the actual "cost" to the estate beneficiaries is lower than the sticker price since it reduces the taxable income flowing through to them on the K-1s.

Has anyone used H&R Block or TurboTax for these estate returns? I've got a similar situation and wondering if I really need a CPA or if the software can handle it.

I'm going through a very similar situation right now with my grandmother's estate. The quotes I've been getting are all over the place - from $2,800 to $6,500 for what seems like comparable work. One thing I learned is that you should definitely ask about their experience specifically with 645 elections, because not all CPAs are familiar with this option. The CPA I ended up choosing explained that the 645 election can actually save money in the long run because it simplifies the tax reporting by treating the estate and trust as one entity for tax purposes. This means fewer separate returns to file over the administration period. However, you have to make this election on the first 1041 return, so timing is crucial. I'd recommend getting at least 3 quotes and asking each CPA to explain their approach to your specific situation. The cheapest isn't always the best choice, but neither is the most expensive. Look for someone who can clearly explain the process and timeline, and who has handled similar estates recently.

I went through this exact situation with my mother's estate last year and can offer some perspective on what you should expect to pay. The $5,200 retainer does seem high, but it's not completely unreasonable depending on your location and the complexity involved. Here's what I learned during my search for the right CPA: 1. **Get itemized estimates** - Any reputable CPA should be able to break down their fees by specific services (initial 1041 with 645 election, ongoing quarterly filings, K-1 preparation, final distributions, etc.). If they won't provide this breakdown, that's a red flag. 2. **The 645 election is actually beneficial** - Don't let the CPA convince you it's overly complex. It's a relatively straightforward election that simplifies administration by treating the estate and trust as one entity. This typically SAVES money over time by reducing the number of separate returns needed. 3. **Shop around but focus on expertise** - I got quotes ranging from $2,400 to $5,800 for similar work. The key is finding someone with specific trust and estate experience, not just general tax preparation. 4. **Ask about the timeline** - Make sure they understand your deadlines. The 645 election must be made on the first 1041 return, and missing this deadline can cost the estate significantly more in future filing requirements. For an estate with $350k in investments plus real property, I'd expect to pay somewhere in the $2,500-$4,000 range for comprehensive services, assuming you're not in a high-cost area like NYC or SF. The fact that most assets were in trust (avoiding probate) should actually make their job easier, not more expensive. Don't be afraid to negotiate or ask for a fixed-fee arrangement if the estate's complexity is fairly straightforward.