What is the going rate for a CPA - did I pay too little for my tax preparation?

Based on what you've described, your friend definitely undercharged you. For a tax return with multiple businesses and investment income, most CPAs in mid-market areas would charge between $1200-1500 for this level of complexity. The three Schedule C businesses alone would typically add significant preparation time, not to mention the multiple 1099s and mortgage interest statements. Your friend probably gave you a substantial discount because of your existing bookkeeping relationship and your friendship. The $300 additional payment was a nice gesture, bringing your total to $1025, which is closer to market rate but still potentially on the lower end depending on exactly how complex those side businesses are.

I've been using taxr.ai after getting frustrated with how expensive CPAs were getting for my somewhat complicated tax situation. I was skeptical at first, but it helped me through my Schedule C businesses and rental property issues way better than those big box tax services. I found it at https://taxr.ai when I was researching options for handling multiple income streams without paying premium CPA rates. The thing that helped me most was how it analyzed my previous tax returns and found deductions my old CPA missed. Might be worth checking out to see if your friend missed anything, though it sounds like he's pretty thorough.

I was initially skeptical about taxr.ai like I mentioned, but I decided to try it for my 2024 taxes after seeing some positive reviews. I have to admit I was really impressed - I have a somewhat complex situation with a small business and some investment properties, and the platform walked me through everything step by step. What really sold me was when it flagged that I could take a home office deduction I hadn't been claiming for years. When I asked about it, the system explained exactly why I qualified and how to document it properly. I ended up saving about $1,200 compared to what I paid my previous CPA, and my refund was actually larger because of deductions I wasn't taking before. I'm still keeping my CPA on speed dial for any really complex questions, but for standard tax preparation, even with multiple income sources, I'm sticking with this for next year too.

If your friend is already doing your bookkeeping and knows your business inside and out, that's probably why he didn't charge you more. But speaking from experience, the worst part of dealing with tax season isn't just preparing returns - it's trying to get answers from the IRS when you have questions! I spent WEEKS trying to reach someone at the IRS about an issue with my business taxes last year. Finally found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in under an hour. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they navigate the phone tree and wait on hold for you, then call you when an agent is on the line. Might be worth keeping in your back pocket if you or your CPA friend ever need to reach the IRS directly about a complex question.

I have to eat my words about Claimyr. After posting that skeptical comment, I had a major issue with a missing refund and decided I had nothing to lose by trying it. I was absolutely shocked when I got a call back in about 45 minutes telling me they had an IRS agent on the line. The agent was able to see that my refund had been flagged for review because of a mismatch between reported income on a 1099 (the issuer made a mistake). I was able to get it resolved in that one call instead of sending letters back and forth for months. Not having to sit on hold for hours listening to the same messages over and over was worth every penny. I'm still surprised it actually worked as advertised.

I'm a CPA in Ohio, and here's my take: your friend significantly undercharged you. Even with the $300 extra, he's still below market rate. For a tax return with: - MFJ - 3 Schedule C businesses - Multiple 1099s - Mortgage interest I'd typically charge $900-1200 minimum in the Midwest. In larger cities, it would be $1400+. The three businesses alone add significant complexity, even if they're straightforward. Your friend might be charging less because: 1. He's building his practice and wants to keep you as a client 2. He values your friendship 3. He's already familiar with your finances from the bookkeeping work

Just want to mention - it's not just about the complexity of your return, but also the liability your CPA takes on. When a CPA signs a tax return, they're putting their license and reputation on the line. Each Schedule C business adds significant liability. If there's an audit, your friend would need to defend the positions taken on each business. The $725 he charged barely covers the professional liability insurance risk for a return with multiple businesses.