How Much Does a CPA Cost for a Physician Practice?

CPA fees for a physician practice generally fall into one of three tiers: compliance-only tax prep runs $2,500–$20,000 per year, bookkeeping-plus-tax runs $6,000–$45,000 per year, and full CFO-level advisory runs $30,000–$120,000 per year. If you are shopping for a CPA, you will encounter a wide range of prices and an even wider range of what those prices include — a $3,000 tax return and a $60,000-per-year advisory engagement are both “CPA services,” but they are entirely different products.

This article breaks down what the market actually charges at each tier, what you get for the money, and the question that cuts through everything: is your current CPA delivering advisory value, or just compliance output?

What Are the Three Tiers of CPA Service for Physician Practices?

Tier 1: Compliance-Only (Tax Preparation)

This is what most CPAs actually sell, regardless of how they describe themselves. The deliverable is an accurate tax return, filed on time.

What is included:

• Annual federal and state tax returns (1120-S for the S-corp, 1040 for you personally)
• K-1 preparation and flow-through
• Basic deduction capture based on what you provide
• Extension filing if needed

What is not included:

• Proactive tax planning during the year
• Quarterly estimated tax guidance
• S-corp salary optimization
• Retirement plan contribution analysis
• Cash flow or distribution guidance
• Any communication between January and October

Market rates:

• S-corp 1120-S + owner 1040, solo practice: $2,500–$5,500 at a local or regional firm
• Add multi-state returns: +$500–$1,500 per state
• Larger or more complex practice (multiple entities, investments): $6,000–$15,000
• Mid-to-large regional CPA firm with healthcare specialization: $8,000–$20,000 for the same return, with a longer turnaround and more associates involved

The compliance-only reality: The physician pays $8,000–$12,000 per year for a tax return that accurately reflects whatever happened during the year. Nobody called in November to discuss the Q4 retirement contribution. Nobody flagged the S-corp salary creeping above the optimal level. The return is accurate — and the physician is still overpaying taxes, year after year, because the structure is never reviewed.

This is the most common CPA relationship for physician practice owners generating under $1 million in revenue.

Tier 2: Bookkeeping + Tax (Combined Service)

Some firms or virtual accounting services bundle monthly bookkeeping with annual tax preparation. The deliverable is clean books monthly and a return at year-end.

What is included:

• Monthly transaction categorization and reconciliation
• Financial statements delivered monthly
• Annual tax return (same as Tier 1)
• Basic payroll coordination (sometimes)

What is still not included:

• Proactive tax strategy
• Quarterly projections
• Retirement planning integration
• Cash flow forecasting
• Advisory output of any kind — the financial statements are delivered, not explained

Market rates:

• Generic bookkeeper + separate tax CPA: $6,000–$18,000/year combined
• Bundled bookkeeping + tax from a virtual accounting firm: $15,000–$35,000/year
• Healthcare-specialized bookkeeping + tax firm: $20,000–$45,000/year

The Tier 2 reality: The books are clean and the return gets filed. But if you ask “what is my estimated tax liability right now” or “how much can I safely distribute this month” — you get silence, a delayed email, or a bill for the additional consultation.

Tier 3: Full Advisory (CFO-Level Service)

At the top of the market, physician practices can engage fractional CFOs, large regional accounting firms, or healthcare-specialized advisory groups for a fully integrated service: real-time financial visibility, proactive tax strategy, quarterly advisory calls, compensation structuring, and forward planning.

What is included:

• Everything in Tiers 1 and 2
• Quarterly strategy calls with a senior CPA
• Proactive tax projections updated throughout the year
• Retirement plan design and contribution tracking
• S-corp salary reviews and adjustments
• Cash flow forecasting and distribution guidance
• Advisory on major financial decisions (vehicle purchase, equipment, entity changes)

Market rates:

• Fractional CFO engagement: $3,000–$8,000/month ($36,000–$96,000/year)
• Large regional firm full-service: $30,000–$80,000/year
• Healthcare-specialized advisory group: $40,000–$120,000/year

The Tier 3 reality: This is what a physician practice at $3M+ in revenue typically needs. At $500K–$2M, the engagement cost often exceeds the ROI — you are paying $50,000 for advisory that produces $30,000 in tax savings. The economics do not work until revenue is high enough to justify the overhead.

Why Are Physician Practices Stuck in the Gap Between Tier 1 and Tier 3?

Most physician practices generating $500K–$2M in revenue are caught between Tier 1 and Tier 3. The result plays out in predictable ways — the five gaps that cause physician practices to overpay taxes are almost all structural, not clerical. They are paying $8,000–$15,000 per year for compliance-only service, but not large enough to justify a $50,000+ full advisory engagement.

The result: they have clean books and filed returns, but nobody is proactively managing their tax position, optimizing their retirement contributions, or telling them how much they can safely take out of the practice each month.

This gap is why practices in this revenue range consistently overpay taxes. Not because the filing is wrong — but because the structure is wrong, and nobody with the authority and context to fix it is looking at it.

What Questions Reveal Whether Your CPA Is Actually Providing Advisory Service?

Before asking “how much does a CPA cost,” ask whether your current CPA can answer these eight questions right now — within 48 hours, without a special engagement:

1. What is my estimated federal and state tax liability for this calendar year, based on income to date?
2. Am I on track with quarterly estimated payments, and do I owe anything by the next due date?
3. What is the optimal W-2 salary for my S-corp given this year’s net income?
4. How much can I safely distribute from the practice this month after reserves?
5. Am I maximizing retirement contributions, and what is the remaining contribution room for this year?
6. What tax strategies am I currently eligible for that we have not implemented?
7. What is my projected year-end tax bill if income stays on its current trajectory?
8. If I buy a vehicle or a piece of equipment this year, what is the actual after-tax cost?

A compliance engagement cannot answer most of these — not because the CPA is incompetent, but because the service is not designed to. The return is prepared from what you provide, not from ongoing monitoring of your practice.

An advisory engagement can answer all eight. It costs more than compliance-only — but the gap in answered taxes typically exceeds the gap in fees by a significant margin.

How Much Does RTW.ai Cost?

RTW.ai was built specifically for the gap between Tier 1 and Tier 3 — physician practices generating $500K–$5M that need proactive CPA advisory but cannot justify, or simply do not need, a $50,000/year engagement.

The structure: subscription-based bookkeeping with advisory integrated — financial statements, quarterly projections, tax planning, and distribution guidance delivered as a product, not an hourly engagement. Tax preparation is priced separately at a flat subscriber rate.

Current pricing starts at $697/month for the bookkeeping tier and scales to $2,297/month for the CFO Advisory package with monthly strategy, integrated tax planning, and a quarterly board seat where Askia joins your partner or owner meeting as your financial voice. Full pricing breakdown at rtwadvisors.ai/pricing.

For context: a physician practice owner paying $10,000/year for compliance-only tax prep and switching to RTW.ai Bookkeeping Pro at $1,097/month ($13,164/year) is paying $3,164 more per year — and getting monthly closes, quarterly projections, tax planning, and an ongoing answer to all eight questions above.

Whether the additional $3,164 is worth it depends on how many of those eight questions your current setup can answer.

How Should You Evaluate a CPA Firm?

When comparing options, ask prospective firms directly:

“Between January and October — outside of filing season — what will I hear from you, and how often?”

The answer tells you everything. “We will reach out if we notice something” is Tier 1. “You will receive quarterly projections and we will call before each estimated payment date” is advisory.

“Will you review my S-corp salary annually and tell me if it needs to change?”

A compliance-only firm will say that depends on what you provide them. An advisory firm will say yes, and explain how.

“What is your average response time for questions between filing periods?”

Seventy-two hours for a straightforward question is the acceptable ceiling. Longer than that is a structural issue with how the firm operates, not a busy-season exception.

The right CPA relationship for a physician practice is not the one with the lowest fee. It is the one where the fee is justified by an active advisory function — and where you are not discovering your tax bill for the first time in April.