Fees are becoming very competitive

[AZ-Tax]

I recently saw a value pak coupon for a personal tax return w/efile for $105 & I believe it includes state. I acquired a new client & they brought in their 07 (fee $191) & 08 (fee $186) tax returns prepared by a CPA. While I recognize the CPA & EA designations, we are all subject to errors but the CPA fee for 08 on a MFJ, same # of kids, 2 states, in fact their 09 return is probably smaller yet I quoted them $195 for 09. I think I am going to need to lower my fees for the 1040 tax returns. A friend of mine at HRB tells me what they would charge which is much higher then me but I think the taxpayers are smarting up to HRB high fees thus the reason they announce yesterday they will miss profit estimates. I am curious, what do you charge to do the simplest return,1040EZ, Single, 1-W2, 1-State, by itself (meaning you may throw it in free for preparing the parents tax return)? Have any of you been forced to lower your fees due to your competitors?

[Jiggers]

1040EZ, 1 X W-2, e-filed

$55.00 + $11.00 for the state return.

1040A, 1 X W-2, L (Property Tax only), M, e-filed:
$105.00 + $21.00 for the state return.

Located in small Texas Town.

Also, I don't charge for the time it takes to the do the return. I charge for the 40+ years of education and experience.

Like the auto mechanic told me: $1.98 for the thing-a-ma-jig and $50.00 knowing where to put the thing-a-ma-jig.

Don't lower your fees.

[KBTS]

Fees

Unless your practice is located in the same area as another user's, any price comparisons are really not valid. What you charge for a return in your area will be totally different from another preparer located in another state - or even nearby town for that matter. For example, I am located in a small rural town about 35 miles away from a large state university. Fees in that town are probably 3X or more what the going rate is here in my location.

Search the board for Bees opinion on fees and you might change your mind about lowering them....he might even chime in on this post and challenge you on this : )

[anu31402]

I am in NYC. A store front (rent) in my area is around $2500 to $3000 per month. Price comparison would be quite subject with another CPA / EA working from home even in the same city.

[Uncle]

I am curious, what do you charge to do the simplest return,1040EZ, Single, 1-W2, 1-State, by itself (meaning you may throw it in free for preparing the parents tax return)? Have any of you been forced to lower your fees due to your competitors?

If the potential client has an invoice from the previous year, I charge no more than half that invoice. Otherwise I would charge $50 for your return, Federal and State, efile, etc. My offices are in a metropolitan area of close to a million people. There is intense price competition here. Jackson Hewitt is advertising $50 less than any previous preparer, and H&RB offices close to mine are advertising a flat $50 for any new client.

[Gretel]

I am in a very small rural town. Since last year I am not doing any return anymore under $110 for new clients. I refuse to go low just to catch a client. Unless the price stays low in the future (which I would not be able to do) the client will leave anyway.

[BP.]

We wear lots of hats in our job, and "salesperson" is an important one. With professional sales training, one learns not to compete so much on price. Though of course you have to be price sensitive to your particular geographical market, as others have pointed out.

Try to compete on all your other strengths and what differentiates you from the competition, and provide outstanding service, service, service. I think that gives one a better chance of establishing very loyal clients who will love you, tell their friends about you, and won't leave you over a relatively small price difference. Once you compete solely on price, you attract people who will leave over a $10 price difference.

All that being said, of course, this economy does make it difficult not to be very price aware. But relationship building is what the long haul is about, and there are people who do respond to that, and who make terrific clients. Just my two cents.

(But, Jeez, Uncle, that IS some intense price competition there!)

[Gretel]

All that being said, of course, this economy does make it difficult not to be very price aware. But relationship building is what the long haul is about, and there are people who do respond to that, and who make terrific clients. Just my two cents.

I second that. People are not only price sensitive they are also desperately looking for people who they can trust anymore. I cannot see how giving into bargaining for the price could convey a picture of trust. Having said that, it is very difficult for me to stand up to my own standards.

[joanmcq]

I run an 'early bird special' on single W-2, EZ type forms for $55 if you get them to me before the second week of February. Includes the state. Otherwise its about $70. I don't do many returns early, so my EZ clients come running in with their single W-2 when I'm not busy.

[taxea]

If the potential client has an invoice from the previous year, I charge no more than half that invoice. Otherwise I would charge $50 for your return, Federal and State, efile, etc. My offices are in a metropolitan area of close to a million people. There is intense price competition here. Jackson Hewitt is advertising $50 less than any previous preparer, and H&RB offices close to mine are advertising a flat $50 for any new client.

How do you make any money? Although the money is not my focus I believe that the majority of us that run our own business are much more qualified than the "jack-in-the-box" businesses. My fees are based on my knowledge, experience and training. I work out of my home so I don't have much overhead. My clients are paying for expertise.

Clients get what they pay for...they either want a cheap badly done return or they will pay for someone who they can trust to do the return properly.