Do you require mandatory E-filing?

[mblatour]

I was just curious how many of you out there require your clients to E-File their returns. I've convinced the majority of my clients to go that route but I got the occasional client who refuses.

In my particular case I received several referrals from a preparer who only paper filed her returns. She would buy one copy of TurboTax and prepared 70 returns off of it. She'd print out her copy, the clients copy and the filing copies and then delete all of the information and then prepare the next return. Not to mention I can't even come close to her average price of $40 for a 1040, Schedule A return and $65 for a 1040, Sch. A return with Schedule C and lot's of depreciable items. I am very grateful for the referral business I've received from her. It's just hard to convince people of what an unusual deal they were getting.

These clients are so used to doing things the old way that some refuse to do E-File. One lady last night told me that she will not do anything that involves the Internet and that she won't risk identity theft. I tried to explain that I am an ERO, got finger printed at the police station, and that I password protect, lock my files and back everything up in order to be as secure as possible. I do realize that anything is possible, but I have to think that if identity theft involving E-Filed returns has to be rare, if at all. If there was an issue, I'd think the word would spread like wildfire NOT to do it. On the otherhand, the numbers are evermore increasing for E-Filed returns and it wouldn't surprise me if it becomes a requirement some day in the future; with the exception of returns that cannot be E-Filed.

I'm going through ink and paper up the ying-yang already. I really hate printing out returns the old fashioned way. I guess I've become spoiled. I did tell my client that I would do it. Just wish I could have convinced them otherwise.

Thanks for letting me vent.

~Becky

[Mike Mac]

e-file everything

I'll end up efiling all 350 of my clients this year and likely have none paper-filed. I do make it a requirement. Here in MN you can mention that you'll have to charge them more if you would would paper file (even though it is eligible for efiling) due to the fine MN imposes on tax preparers in those cases. I think your clients would accept the fact that efiling is part of your business process and once you convinced them the 1st time they'll realize how easy it makes it for them as well.

It sounds like you get those referrals from one person. What might help is if that person told the client they refer to you that you do efile everything. That way you won't be the one telling them first.

Mike

P.S. Do you charge separately for doing the Property Tax Refund (MP-1) forms?

[mblatour]

Mike,

This may seem like a dumb question but if I file under 100 returns a year, do I get fined by MN for that? I haven't been fined so far and I know I've had at least a couple of paper returns each year.

It's my 5th season and I'm at around 75 now. I had a goal of 100 by my 5th year, but I do very little advertising and grow mainly from referrals (and live in the country; so no storefront visability and 95% of my clients travel to me). I'm up about 20 returns this year, so that in itself is exciting to me.

The last preparer did send all of her referred clients a letter mentioning that I E-File, but it doesn't say it's mandatory. I've received about a dozen clients from her in the past few years. They all seem so surprised when I mention the E-File option. "E-File, what's that?"

I do charge extra to do the Property Tax return. I usually charge $15 but also have a 10% new client discount and 5% senior citizen (over 55) discount. There are a few situations where I don't charge to prepare that return. Most of my clients mail me a copy of their statement when they get it along with a $15 check. I prepare the return, E-file it, then mail them their copies. I have pretty low rates overall, so the fee for the property tax return just helps to catch me up a little with the big guys.

Do you charge for it?

Becky

[JohnH]

I'm just the opposite.
I require mandatory paper filing - none of my clients seem to care.
(But I wouldn't touch a return for $40, so I'm not offering price competition to other preparers)

[Possi]

efile

I will only file paper if I absolutely must. One law office that I do a trust-fund-baby's return requires me to send them the paper return and they file it.

If I do a paper return, I will charge a little extra for it. It takes more time for me to process the paperwork, in addition to the printing.

This year, I have more out of town returns than ever. I'm sending them by email and really saving print time and post office time.

I am hoping to hit my goal of 400 this year, but might fall short. Last year I did about 320 and a couple of weeks ago, I was up by 65 (comparing the number of returns done by the same date the previous year.)

If I had to do them by paper, I'd need a staff in my office. So far, I get occasional help from my daughter with the phone and filing. (and LOTS of help from this board!)

[taxmom34]

becky

in reading your post i thought you were referring to me. so strange, i had worked for HRB for 16 years and retired, but people knowing me personally and relatives pressed me to continue doing tax returns. i used turbo tax for around 12 years, but my pricing was based on HRB fees, i charged half of what the big company had been charging and every couple years i would increase my fee by $5 or so. so 12 years ago i would have been charging $40!! . i had around 90 clients at peak (i'm cutting back so i can truly retire) this year only 30. I used to feel guilty in charging so much when i worked for Block, but now i see where just walking in the door will cost you $100. Their fees really jumped when they got computers and i didn't.

thanks for bringing me back to the beginning.

[thomtax]

Will do both

However, efile saves time, paper and toner expenses, so if it is a return that can be efiled, but the person prefers a paper return, I will do it but charge a small additional fee to cover the additional expenses. Like one of the others mentioned, paper filing would require additional help.

LT

[RitaB]

I do not require e-filing

I actually charge $20 for e-filing even though it is actually easier on me (usually) if client e-files. I do this because it's a service to them (and IRS), and it increases my income. Here in Small Town, TN a lot of folks would just as soon paper file, so I don't push it either way. I give some "special" folks free e-file, usually church friends. I gave one couple free e-file last week simply because they had four state returns, and it saved me a lot of paper to keep from printing the filing copies. (If they had asked for e-file, I would have only charged $20, not $100)

I am curious if anyone else charges for e-file.

[dkss]

i efile

I efile most of my returns. Last year Indiana required preparers who prepare more than 100 returns to efile the returns. I explained to clients that since the state requires the state return to be efiled then the federal return will also be efiled. Not many complaints about the change - in fact many comments this year on the speed of filing last year!

Also, my fee for efiling is $5 for an 8879 and $5 for an IT-8879.

[mblatour]

Taxmom34,

That's really funny! You're welcome for the flashback. My first year I was pretty low on my rates because I felt like I couldn't charge as much as the big places that have all of the overhead costs.

I've gradually raised rates now to be more competitive, but still a good percentage lower than Block and similar places. I offer a more personal service and take whatever time is necessary to learn about my client in order to make sure I can get all of the credits and deductions that apply. My expenses are much more now with the software, books, and office supplies than they ever were before. I'm pretty happy with how things are going and growing.

I don't charge for the E-Filing but rather put a line item on their invoice that states : "Federal & State E-Filing Fees (no charge)...........$0.00." That way at least they can see that there are fees that I am covering for them. In the long run I definitely prefer E-Filing.

Becky

[BHoffman]

Hi Becky - I had a few old fashioned clients who were leery of the internet and indentity theft until I pointed out to them that the Post Office security measures were nonexistent and the internet providers go to a great deal of effort to keep personal information secure. I believe efiling is much more secure than using snail mail. How much stuff gets lost in efiling vs. how much gets lost in the mail?

[RitaB]

You got that right! Also -

Hi Becky - I had a few old fashioned clients who were leery of the internet and indentity theft until I pointed out to them that the Post Office security measures were nonexistent and the internet providers go to a great deal of effort to keep personal information secure. I believe efiling is much more secure than using snail mail. How much stuff gets lost in efiling vs. how much gets lost in the mail?

I would pay the $20 for e-file (to myself, what a deal!) just to avoid the "certified mail return receipt requested" ordeal at my local post office. We must have the worst run post office in the universe. They're friendly and all, but tick tock, people!

[mblatour]

BHoffman,

Very good point. I think I'll use that from now on. I've had clients lose their refund checks in the mail. One is still waiting for one from last year that she realized that she never received. She contacted the Feds and they said they sent the check but it hadn't been cashed yet. Then client recalls a time when they saw mail in their ditch and thought they got it all, but perhaps didn't? Now she has to deal with a new check being reissued. What a pain.

[Lion]

E-File

I e-file everything I can and approach my clients as if they agree. If a new client looks funny when I get to the e-file part, I tell them about accuracy, acknowledgments, speed, no trip to the PO, etc., in other words THEIR benefits, not mine. I have only two clients who won't e-file. Starting next year, I'm tacking on a paper filing copy charge to my bill. (The past two years, I'd promised a price hold to loyal customers who followed me.)

[erchess]

Efile

I have efiled all the returns I have done since I hung out my own shingle except one. I do charge $15 extra for paper filing.