Discussion:Current year fees

1. Simple individual return (W-2s, schedule A and handful of interest, dividend, capital gain items)

2. Individual return with schedule C, assuming client does decent job of recordkeeping.

3. Individual return with many k-1s, stock transactions, etc.

4. Simple S corp assuming client provides fairly decent set of books (just needs depreciation, a few reclasses, etc.) and only 1 or 2 shareholders

5. S corp where clients books need lots of work and/or several shareholders are involved.

6. Hourly rate for research, IRS work, etc.

Thanks!

I am not being flippant, but check out the recent discussion of the new professional in Florida.

1. Simple individual return (W-2s, schedule A and handful of interest, dividend, capital gain items) $300-$350

2. Individual return with schedule C, assuming client does decent job of recordkeeping. -$400-$500

3. Individual return with many k-1s, stock transactions, etc. -$600-$800

4. Simple S corp assuming client provides fairly decent set of books (just needs depreciation, a few reclasses, etc.) and only 1 or 2 shareholders - $500

5. S corp where clients books need lots of work and/or several shareholders are involved. $900-$1,200

6. Hourly rate for research, IRS work, etc. - i try to charge $250 an hour for most work i do (thats what my firm i work per diem at bills me out at, i know i dont have same overhead but thats what i strive for) for simple returns such as #1 that may take only 20-30 minutes I will still charge $250

any constructive thoughts would be greatly appreciated

I know we all do a great job and are focused on that, but don't we need to interact more on exchanging ideas on what the market rate is for a good tax professional?

large cpa firms seem to be in coordination, what I mean by that is every CPA firm I have worked for (about 6-7) seem to have very similar billing rates, but when it comes to us small to medium sized self employed practitioners its as if it's the best kept secret going.

I ask this in a respectful manner, it keeps me up many a nights :)

any sincere thoughts would be greatly appreicated.

I hope everyone here has a great tax season.

The Efficient tax office Quickfinder handbook has a sample fee schedule which I think is a good starter. Besides that, I think many are looking for some magic numbers so they can compare their fees.

The other this is I'm still officing out of my home so I also don't have the overhead of a regular firm.

My question: As a new business, this will be the first year that I'm utilizing part time help for tax preparation. I'm curious as to the standard practice of payment to these workers. Do you stick to a basic hourly rate, an hourly rate + fee per return completed, or pay by the return completed? Any advise would be helpful.

Thanks,

Thanks for the reply.

As far as paying per diem helpers, thats a tough call.

most firms pay per diem help by the hour, as far as I can tell. In NYC, for a low level per diem help, i..e someone who can prepare a basic 1040 and home state and get it to the point where you only make window dressing changes and finalize the return I would say pays a helper about $20/hr. On the high end, as in a tax preparer who can basically take on any type of return from high net worh individual, multiple states, k-1's, etc. as well as corporate and partnership returns and take charge by calling client directly and getting return in final review order for a partner pays anywhere from $40/hr to $70/hr.

it sounds like u are looking for basic help to ease the inputting monotony, etc. I might say since your state differs with cost of living etc. maybe $10/hr you would find some decent help especially in this economy.

good luck.

I'm right there with you on prices.

1040s: Start at $100. Average return is about $165. I do not do many for people who do not have an accounting relationship with me (say 50 with no business).

Work at home in South Florida mainly by myself. About 30% of annual revenue is iccome tax returns corp/pes). Others is accounting and I charge extra for 940s, w2, 1099.

I remember over 30 years ago a very successful partner in a CPA firm discussed charging fees to his clients. He said, "Always bill until they complain. If I were to increase my fees by 20% I won't lose 20% of the clients and, if I did, I would bill the same with 20% less work."

Frankly, I'm shocked at the amount the national tax services charge especially for people who have several issues going on. So. I'll repeat, whatever we charge.....it's not enough.

thanks for the feedback.

this year as far as fees are concerned I am going to try to get very good fees for new clients which is always so crucial since it impacts us for as long as we have that client.

however, with the state of the current economy, i am considering not raising any current clients unless there is additional work involved that warrants a raise.

I'm concerned that it wouldn't look good if the clients are going through hard times and we raise them our usual amounts.

any thoughts on that?

have a great day.

i even offer to wait for clients to get their refund until i get paid or if they want to pay my fee in installments i work eith them too.

of course, this isnt common practice its for long standing loyal good paying clients i trust.

this year i feel we need to separate ourselves from the rest of the pack becasue peopel may be looking elsewhere just based on the fee or amazingly try to o tbeir return on their own and save the tax accountign fee (while costing themselves hundreds or thousands) for example, forgetting to take the recovery rebate credit if they didnt get whole thing prior year, not realizign MFS was better than MFJ or not adding the property tax deduction to the standard deduction for homeowners who cant itemize, etc.

any thoughts on keeping fees same (unless more work involved) ?

This is my first year on my own, so I'm trying to gain clients, but still, the returns I used to do as an intern are not $300-$350 returns. I figure if I'm making $60/hour, I'm doing OK.

you would have to do 40 basic returns at $100 per return just to pay for the tax software program!! :(

I do have my own practice (for the first time) this year. I don't have any employees or pay any rent, and I'd rather do 100 $250 returns than 250 $100 returns, but I don't have the luxury. I also don't have any CPE requirements until 2012 due to my new licensure in late 2008.

For what it's worth, I live in South Jersey, five minutes from Philadelphia.

That seems to be a quite restrictive interpretation of the law.

Thats great, it sounds like you have a game plan thats working, and you are doing exceptional if this is only your first year !!

As far as this being a violation of a law, i would have to see the rule in writing to actually believe its that restrictive. if its true than why does H&R block post their average tax return fee, etc ?

i cant imagine we actually use this discussion to set our own fees.

2. Individual return with schedule C, assuming client does decent job of recordkeeping. $250

3. Individual return with many k-1s, stock transactions, etc. $400

4. 1065's with two partners or simple 1120's: $400

5. 1065's with multiple partners (6 or more): $1200

6. Hourly rate for research, IRS work, etc. $75

7. State returns: $175

I am in Houston but I have clients all over the state, so I have to manage my fees a little more closely than someone who just practices in the city. I am not going up on my fees this year, as I hit them with an increase last year. It pains me to hit my clients two years in a row.

I am concentrating on building more clients and doing less free work for family..

You're also bound to have expenses - on the order of $10-15,000 per year.

Is $50-55,000 enough for you to earn, especially after paying 15% SE tax and health insurance, plus putting a chunk into your pension, which we know you young folks better be doing, rather than planning on the federal government being able to afford to pay social security benefits by the time you get to retirement age?

Just some food for thought - if you feel your market will bear an increase in your hourly rate once you're more established, I don't think it would be at all unwarranted.

My fees for just a W-2 begin at $75 and then go up from there. Simple Schedule A goes up to $125. If client wants to wait and walk out with return, I tack on another $25 VIP fee. For the W-2 guy, I sit with them, input info, do the idle chit chat and then after I click the print button, I inform them that they are going up front and my office manager will compile the return and go over it with them. I'll take $75 for less than 10 minutes of work any day. The problem I have ahd in the past was the charging for the extra forms even though the computer did it all. So, now an EIC gets an extra $50, Capital Gains $25 to $150 depending. Schedule C's are business returns. Start at $250 unless super simple. Dependent care credit $25, Hope/Lifetime $25 to 50. I have seen a big increase in my revenue so far for this year by actually charging what I say I should be.

Business returns start at $250 and go up from there. Largest fee is $1,000 for the business return.

H&R Block not only cater to the EIC type of clientle we also cater to small and large business as well as prepare employment taxes, estate returns. There is not one thing that a CPA or an accountant does that we are not able to do.

If I were completely on my own, I would be at my desk 3,000 hours to bill 2,000. If I had the work, of course. Once I'm established, I'll gladly raise my rates, but I feel uncomfortable getting a higher hourly rate for easier work and the highest hourly rate for something I shouldn't even be bothering myself with.

1040 $95 Schedule A $50 Schedule C $70-$130(usually $100) EIC $20 College credits $20 Dependent tax returns $50.

I am in expensive San Francisco Bay Area, and my fees are ridiculously low (home based self-employed and subsidized by hubby). But I am planning on raising my fees and sticking to it. This discussion is very helpful.

I advised him to never do that again. Here's why: word of mouth will have that person telling five of their friends that for the price of turbotax they just had their return done by a pro. We'll now get five more of them showing up within the next few weeks looking for the same deal. The word-of-mouth effect will continue until we have 200 new clients expecting a $65 price point. Could be a disaster in the making.

So we created a policy: Nobody escapes for under $100.

On the flip side, if parents come in with a return that costs $150 to do and they have a couple of their kids' returns with them to prepare we might only charge another $40 per kids return, and "bundle" the pricing. The difference is that now you have parents telling five of their friends that they had their taxes done along with their kids at a great price.

There's a perceived value effect here too. It's much better to set your prices on the high side rather than try to be the wal-mart of your profession.

-Chris

Has anyone had success with that? If not, where does the model break down?

sure I had success with that, my only advise based on my experience, is even though yu want to build a practice first and charge low fees, dont go too low, its much easier to come down on a fee than to go up.

lets say the returns you got so far for $125, amybe you could have gotten $200, or at least say $200, and see what their reaction is, and adjust accordingly if you are worried about losing them, chances are at the worst, you come down to $160 or $180 and you're still ahead of the game, its a learning process but enjoy the ride, eventually you will get really good at what you do and you may not feel good unless you get what you deserve in fees. but you know your own situation best im just tryign to pass on my mistakes as well as things that seemed to work.

2. Individual return with schedule C, assuming client does decent job of recordkeeping. $400-550

3. Individual return with many k-1s, stock transactions, etc. $500-3,000

4. 1065's with two partners or simple 1120's: $795-1395

5. 1065's with multiple partners (6 or more): $1500-4000

6. Hourly rate for research, IRS work, etc. $200

7. State returns: $170

business returns-start at $550(highest was $1500)

sometimes i give a discount depending onm the situation.

i generally do dependent/childrens taxes for $50. some of those kids grow up and always want the $50 fee even when they get married. someitmes i do keep it low if im making good $$ from their parents. sometimes one part of the family subsidizes the lower end return(but they dont know that)

I'd rather do that than bid against myself.

1. Simple individual return (W-2s, schedule A and handful of interest, dividend, capital gain items) : $350 - $550

2. Individual return with schedule C, assuming client does decent job of recordkeeping. $ 400-$650

3. Individual return with many k-1s, stock transactions, etc. $850 - $1800

4. Simple S corp assuming client provides fairly decent set of books (just needs depreciation, a few reclasses, etc.) and only 1 or 2 shareholders $850 - $1500

5. S corp where clients books need lots of work and/or several shareholders are involved. $1500 - $2500. They have to sign up for bookkeeping going forward otherwise, I will not take them.

6. Hourly rate for research, IRS work, etc. I don't charge by the hour for anything.

if you are not as good, get as good (use the additional fees to pay for CPE this year)

1. Single / Simple individual return - just W-2s $87 2. Single / Simple individual return (itemized) - just W-2s $137 3. MFJ / Simple individual return - just W-2s $137 4. MFJ / Simple individual return (itemized) - just W-2s $187

Schedule C - starting at $75 extra Schedule D - starting at $5 per entry Schedule E - starting at $50 extra Additional State - $30 extra

This is my 3rd year, so I have to keep my prices low. I try to distinguish myself by providing better service than my competition along with tax planning and financial investment advice.

I will start rasing my base prices by $8 per year. My good clients who are my investment clients also stays the same. Folks to bring in business to me also says the same.

The ironic thing is that he used to call me for advice and questions.

I was over at Petco yesterday with my wife and girlfriend. Long story, but I had threatened both of them that I was going to put them up for adoption, and get a pet in their stead.

Well, looking around Petco made me decide to keep my two ladies. Dogfood for the non-pedigreed mutt was going for $47 a bag. The fancy French brand for Paw, Skin and Coat went for $50 a bag.

Don't talk to me about grooming! To groom your new dog costs more per week than it costs me to send both my ladies to Chez Frisson D'Hair down here.

Yet, the Petco store was packed with consumers paying out the nose, even in the midst of this slowdown.

Some businesses seem to be able to capture the consumers' imagination and pass their costs thru, and some do not. I have not liked the trends in non-medical professional fees for some time now.

I had a client who shoved all numbers into the Wages line: W-2, 1099-Misc, 1099-R (401k from her JOB), 1099-Int (from her Work credit union). She came to me when the IRS sent her a CP-2000 letter. Now is a good client.

I think I'm close to where you are on the fees, slightly below, do you feel your fee is average or higher than average? i'd like to think we are at least slightly higher than average assuming we are better than average as far as the service we provide

since the return was already done I didnt get into it with her, i just gave her enough off to make her happy and for me to not lose out on the entire fee, i figured since i competed the return already getting $100 instead of $175 (just an example) is better than getting nothing for it.

next year i may tell client that unfortunately, i can no longer charge that fee.

if i were you i wouldnt e-file the returns until the check cleared.

Nance