"What Do You Charge?"

[FEDUKE404]

My perspectives

I generally avoid giving any price quotes over the phone, although I will (when pressed, and after a couple of cursory questions if the potential client seems willing to provide some information) offer a "it usually costs so much for such and such but circumstances could easily change that" response.

If someone is merely price-shopping, they may well be the type of client I do not need or who will create problems ("....but you SAID....") down the road. I simply do not operate in an Amazon.com world (cut someone's price by 1¢) to snag a client. Also, the vast majority of my new clients are referrals, which to a certain extent removes the "best price" crowd.

As for those who charge by the form. I know that has been the standard for many over the years, especially in the world of HR Block et al. It's a good way to make the starting price fade in the dust when compared to the final price. But many "customers" of such are not pleased with the "gotcha!!" invoice that eventually appears. And that approach is one I will simply not use. (Reminds me of my lawyer who charged me $15 to send me an email - "I got your information. Thanks!")

Furthermore, some forms require little (or NO!) effort on my part (OK, other than perhaps printing another piece of paper) as the software automatically handles it. Examples would be Sch SE from Sch C entries, Sch B once you have "enough" interest/dividends, Social Security taxation calculations, and similar. Entering three W2s does not take significantly more time for me than entering one W2, no more so than entering three Form 1099-INTs versus a single same. Such actions are far removed from the days long gone by when I had to get up from my desk, walk across the room, grab a couple of blank forms, and then sit down and fill them all out.

For those reasons I make a reasonable (to me and to the client) to charge for the complete product, with that charge being related to the effort/time exerted by me as well as "the use of my knowledge." Quite frankly, were I to be "my" client I might take some offense to seeing surcharges for another W2, or two more bank interest entries, or "preparing" a worksheet to determine how much Social Security was taxable. Someone recently posted that they charge $25 just to provide their client with the first printed copy of their own tax return. Wow!

For the record, I have had very, very few clients who haggle over the price. This year, out of necessity, I've had to put what amounts to a reasonable across-the-board increase in effect just to cover higher software costs and the (ahem!) IRS PTIN charges, as well as my general underlying cost increases. I daresay no one will even bat an eyelash!

But, to each his/her own. I shall now climb down from my soapbox and learn from others here.

FE

[BHoffman]

I tell them that if they will mail a copy or fax their last year's return to me then I'll take a look and call them, give them a free initial consultation, and a firm fee price. The word "free" usually gets some attention. I try to provide everyone with some sort of general tax information that they might find valuable or interesting during the free consult. I've actually gotten referrals from people who thought my fee was too high and went elsewhere but referred their more wealthy friends and family. Nice

Yes, I am very careful to respect the "Pursuant to U.S. Treasury Department Circular 230, unless we expressly state otherwise, any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another party any matter(s) addressed herein." So, I keep it very general.

Sometimes it isn't even much about taxes. One woman I called had a question about LLCs. I explained how LLCs are taxed as disregarded entities unless elections are made. I heard her dog bark. We talked about dogs. She's a client now and referred her friend.

Very little effort on their part and not usually a lot of time on mine. I don't like the face-to-face unless they've already agreed to have me prepare their return. If I have to put shoes on it better be billable time.

[ChEAr$]

Very little effort on their part and not usually a lot of time on mine. I don't like the face-to-face unless they've already agreed to have me prepare their return. If I have to put shoes on it better be billable time.

Hey! You are qualified to practice in Alabama.

[Uncle]

Someone recently posted that they charge $25 just to provide their client with the first printed copy of their own tax return. Wow!


But, to each his/her own. I shall now climb down from my soapbox and learn from others here.

FE

Indeed I do charge $25 for the first printed copy. If I send an encrypted and password-protected copy of the tax return to the client, it takes me a couple of keystrokes. That is included in my base price for the return. If the client insists upon a CD or a a wad of pages in a nice looking folder, it costs me time, effort, and money. I try not to work for free.

And yes, I do compete on price. As long as Walmart and Cosco have not declared bankruptcy, I shall likely continue to do so. If someone calls asking about price, in almost all cases they are not so concerned about price but they are not sure how to ask about professional qualifications, how they will be treated, and whether I might be a good fit for them. I or my staff say something along these lines "You say your return is very simple? OK. Our price for a simple return is a flat $100 and that includes Federal and State, efiling, and an electronic copy. If you require schedules or there are any extra complications, that may cost more." I regard the caller as a potential new client. Our effort at this point is to get to know the potential client, reassure them, and get them to make an appointment. If they will not make an appointment, I am merely out a phone call. If they come for an appointment, I and my staff have a chance to establish some sort of trust with the potential client. If we are successful, at this point almost all potential clients agree to have their returns prepared. The price, for them, is no longer a major issue. If the return is indeed very simple, it will only take about fifteen minutes to complete. I can force myself to prepare simple returns at the rate of $400 per hour. If the return is complicated, well fine, I can complete the thing and charge accordingly.

Almost all of the potential callers who inquire about price and who can be persuaded to actually come to our offices have been converted into multi-year clients who are willing to pay a reasonable price for professional services. I regard every new caller as a potential client. I try to not discourage potential new clients.

[taxcraft]

Study your past returns

I tell them to pull last years return and count the pages they sent in to the IRS and then multiply by $16 per page...or some other number. Add a few dollars for extra W-2's or 1099's.
Study your past returns to come up with an average per page providing what you want to make.

[lenboush]

The following is posted under the FAQ's on our website and our staff is instructed to read it verbatim when asked for quotes:

Will you quote a price over the phone? Unfortunately, it is impossible to quote prices without actually seeing what needs to be done. Even then, there are many variables that can crop up in the interview process. As a result, it is our policy to NOT quote fees at all, whether over the phone or even face to face. We do understand, however, that clients want to be sure that they are being charged fairly so we do provide the following information:

1.Our fees generally run at least 15% to 20% less than the national chains and most CPA firms.
2.We guarantee new clients, in writing, that our fee will save them at least $50 over what they paid any other paid preparer to prepare their previous year’s tax return. The client must bring in a copy of the previous year’s tax return prepared by any other paid preparer along with a receipt for the amount paid.
3.If, after we are totally finished with preparing your tax return, you are not completely happy, we will return your materials to you so you can go somewhere else. In that case you will not pay anything at all and we will part friends.

[DaveO]

I tell them the basic return starts at $100 and goes up by about $25 for each form or schedule attached, more if I have to compile information. I follow up with a question about self employment, children, home ownership, education or whatever just to see if they want to discuss their situation or are just window shopping.

I'm reminded of a sign I saw at a plumbers office;

Woe to the civilization that tolerates shoddiness in philosophy because it is an exalted art, but scorns excellence in plumbing because it is a lowly art. For neither their pipe nor their theories will hold water.