Tax Return Fees> Recession

[jeff501]

This may be a bit off subject, but it seems like oftentimes when we give a discounted fee to someone we'll get a call in a few days asking about what we charge and hear "but you only charged $$ to someone else!" Usually this has been the case with a new client. If a prior client is having a hard time, we'll still work with them, and usually there's no problem. Many stuck with us when we were just starting out and we don't have a problem with helping them now.

Several years ago we stopped giving estimates on the phone, only to say "our fees are resaonable and it's not possible to quote a fee without knowing your tax situation". In the past, someone would say they only had a couple of W2s, etc. then show up with all kinds of things and think they should only pay the initial estimated fee they heard on the phone. Now, usually we get a "thank you" and they hang up. From our experience, most people who call and the only thing they're concerned about are what our fees are without asking any other questions they're just shopping around and many of them turn out to be PITAs anyway. Some come in with three year's worth of returns prepared by three different firms, too.

One year someone called from the local HRB asking what we charge. I told her next time to block the caller ID if you're going to fee check. Turns out I knew her and we got a laugh out of it.

[Gretel]

What a timely post.

Yesterday I started to compose my year-end letter and struggled how to put it that I want to increase my fees by 30%. Last year I basically didn't go up since I am more on the expensive side already and live in a poor community.

With the increased burden - more detailed interviews, preparer penalties - I feel going up 30% after two years is not too much. I probably will increase the fee more for Sch. D, C, F then I will for W-2 returns. I always work with long year clients if they are in financial trouble. But as the local dentist says: If I start to give discounts because people are poor I will be out of business in no time.

[taxtime]

on redistributing my clients wealth. Many have much more than me and that's not fair.

I am with you on that one. Thats great. I want to redistribute their wealth to me. No discounts.

[Gretel]

What an interesting outlook.

I guess anyone thinking this way has no excuses any more to attack people who receive EIC.

[Jiggers]

Discounts

What a timely post.

Yesterday I started to compose my year-end letter and struggled how to put it that I want to increase my fees by 30%. Last year I basically didn't go up since I am more on the expensive side already and live in a poor community.

With the increased burden - more detailed interviews, preparer penalties - I feel going up 30% after two years is not too much. I probably will increase the fee more for Sch. D, C, F then I will for W-2 returns. I always work with long year clients if they are in financial trouble. But as the local dentist says: If I start to give discounts because people are poor I will be out of business in no time.

When I go to the dentist, doctor, supermarket, drugstore, service station, any location that my clients are employed, I DO NOT get a discount from them or their business.

Never.

So I don't give a discount!

[BOB W]

What an interesting outlook.

I guess anyone thinking this way has no excuses any more to attack people who receive EIC.

I bet that a good 50% of the people that get EIC have figured their income to come out to $15,000 while the rest of their income is paid "Off The Books".

[BP.]

When I go to the dentist, doctor, supermarket, drugstore, service station, any location that my clients are employed, I DO NOT get a discount from them or their business.

Never.

So I don't give a discount!

Definitely something to keep in mind.

[Bees Knees]

Prior to May 25, 2007, the penalty for screwing up a return was $250. Now the penalty is $1,000 per return.

My fee ought to be raised 400% per IRS standards. I'm only going to raise them 30% this year because I am such a generous chap.

[Lion]

Holding, but for other reasons

I kept people who followed me at their prior year fee level for similar returns and promised next year to do the same (giving them three years at the same fee as the company for which I used to work) reminding them that that company raises fees every year but I would not for two years. My main expense is my software, and they made me a multi-year deal. However, I was not then and am not now the cheapest in the area nor the most expensive and do not try to compete on price. For new clients, I start at $500. For clients who followed me, my prices run from $129 through $1,300 or more. Those in distress will have more complicated returns, adding unemployment compensation, taking early withdrawals from retirement plans and other savings, selling more investments, working a bit at self-employment, a spouse returning to work, etc. Any fee concession will be on a case-by-case basis. The lawyer they're seeing to help them get a good severance package did not reduce his $450/hour fee, so why should I?!

[Gretel]

Lion, are you saying that you charge $500 for a 1040A or are you having only clients with complicated returns?

[geekgirldany]

After attending recent ethics seminar and 1040/1065/1120/1120S seminars, and hearing what the IRS expects of us in regards to preparer penalties, and the new disclosure requirements, I am going to revamp the way that I bill my 1040 fees.

I charge by the form/schedule and the number of items on them.

I am following Jiggers on the forms and per item. After looking at the NATP and Intuit pricing reviews I entered new pricing per form and also entered per item fees. I had a few new customer's this summer and they did not hesitate when I told them the pricing. One did give me a little grief. I told him to go to another accountant and get them to prepare it. He paid me.

I have been giving quotes over the phone but I may reconsider it this year. What I thought about doing instead is offering a 30 minute free consultation. Review their information and give them a general idea on pricing with a little added just in case. That is what I had been doing anyways.... telling them it would be between $150-$200 over the phone. Try to give myself a little padding.

This reminds me that I need to sign up to accept credit cards this year.

[Lion]

No 1040As

I don't think I ever did a 1040A. My clients live in pricey Fairfield County, CT, and lead complicated lives with lots of investments and trust funds and K-1s and FLPs and self-employment and investment properties and.... I prepare complex individual returns as well as partnerships and S-corps and corporations and trusts and non-profits and.... They come to me when they think their pricey Manhattan accountant is too expensive or finally realize that the organizer they fill out is input by a newbie in the back room or in India with the senior partner viewing their return only long enough to sign it or they don't work in NYC anymore and want someone to sit with them face to face or they tire of getting an invoice every time they call with a question. I do a lot of hand holding. I'm the neighbor who'll answer their question at church or lives close enough for them to drop off the investment statement at my house. A few are divorced and never dealt with the finances before. Many have start up companies, too small to have a CFO on staff. Many in this county won't touch a return under $1,000 so I'm far from expensive.

[Gretel]

Thank you, Lion. That certainly helps to understand your fees. It's so interesting how different each and every situation is, with us as well as with our clients.

[Gretel]

...and Intuit pricing reviews I entered new pricing per form and also entered per item fees.

Danny, where did you find these reviews?

[geekgirldany]

Here is a link to Intuits:

http://accountant.intuit.com/practice_resources/articles/practice_development/article.aspx?file=bt_intuit2007RatesCentral

Are you a member of the NATP? They also had a survey this year on pricing.