Fee increase

[BOB W]

A lot of people think that since we use computers now, we don't really have to do a whole lot.

I tell them that if I had to do your tax return by hand your bill would be 3 to 4 times as large......................so we both win because I use a computer.

[MAJ]

I Love you guys!!! 8-)

Okay - my buck 3-80....
Cost of living 3.9% That my friend doesn't even cover the price of gas!! And since everything is delivered by GAS in some fashion - Guess what. Increases responded accordingly.

Do you shop in the grocery store.. 3.9% is what they are telling you. Can't figure that out. Lots of stuff has gone up 30-50% over the past year. My salary hasn't. In fact I know many of my clients have NOT gotten a raise in 2 years. Look at Social Security.
I'm not buying this 3.9% at all . Numbers are just that and if ANYONE knows they can be manipulated to say what we want them to say.

Utilities in NJ are up significantly over the past 2 years. More than twice a year Electric was granted 10 & 14% increases. Natural Gas wasn't far off. Funny some sited higher fuel prices as part of their reason. Those guys -GET RAISES - PERIOD!

Now let's look at our world.
IRS Registration $63.00
Fingerprinting (on the way) $100.00
NY State $100.00
Continuing Education {guess-timate} $300.00 {conservative}
That's not going anywhere (am I off my rocker).
---------------
$550.00
That's on top of our normal expenses.
And Yes - Paper and Ink have gone way up. What hasn't. Folders etc....

I've got to raise the rates this year... I think 10% is FAIR. Of course - We know our clients finances better than some of them... Those that are hitting it rough I may cut them a break. Usually - when I do that I make a plug for referrals.

See my next post on Cost Saving Ideas and Suggestions...

[Burke]

A lot of people think that since we use computers now, we don't really have to do a whole lot.

[Jiggers]

Several years ago I had a client that usually only filed a 1040A. For many years.

Then she decided to be self-employed and she also received an oil and gas lease. Schedule C, SE, and E were now required on a long form 1040, and not a 1040A.

She blew a gasket when I raised her fees considerably.

But when I explained that when she went to the local supermarket and purchased one bag of groceries for $25 (way back when) and then the next time she went and purchased 3 bags, that she couldn't expect to pay only $25 again, she understood. Simple explaination for simple folks!

I raise my fees every year. I lose more clients to the funeral homes than to competitors.

[geekgirldany]

My biggest mistake that I made was underpricing myself when I first started out and 10 years later I still am making up for that mistake. I learned over the years people do not always respect the cheapest places and most people do not want the cheapest price anyways they want good service and someone that is up to date on all current tax laws.

You've got that right. I am in the same boat. Under priced myself 11 years ago also. I went up $10 on everyone two years ago and I had several pitch a fit. I told them if they can not afford my prices then go to a franchise preparer or anyone else and see if they can get a better price. I am going up 5% on a client by client basis.

Last year I had one complain because I went up $15. "Why do you charge so much when I already have everything wrote out for you in a binder. All you have to do is type it into your tax program". I proceeded to explain to her that I can not only go by her numbers. I have to go by the forms they have to prepare the return, I then look at her binder, then I go back and recheck.... then go back and recheck. How I have to take continuing education every year. I also added she can go to someone else if they feel like my pricing is not worth paying. She started apologizing and said she did not know it was that complicated and took so long to prepare. ??? Geez! Her husband told me they were very happy with me and gave wife a look.

[RitaB]

Everything goes up

I raise my tax preparation fees every single year. Also, I never send a letter out stating that. Last time I checked, the gas station I go to did not send me a letter stating that the cost of gas went up 10 cents a gallon.

I find that every time I go to the dentist or doctor that is true as well.

Hey, one of my PITA clients increased his own fee the other day. Came in late for me to do his 2010 return. Listed his 2009 tax prep fee as $25 higher than I actually charged him. I figured the least I could do is make it a reality for him.

[equinecpa]

How do you calculate your fees?. Do you base your fee on time or calculate a form amount. I have set hourly rates for different services. When I bill I'll either write the bill up or down depending on my perceived value for service.

[Matt Sova]

Fees

I raise my tax preparation fees every single year. Also, I never send a letter out stating that. Last time I checked, the gas station I go to did not send me a letter stating that the cost of gas went up 10 cents a gallon.

[Burke]

That does happen. So are you saying you bill extra for "consultations" at the time of the consults?
Or at tax time on top of your basic tax preparation fee?

At the time of the consulting now. I tried adding to the tax prep fee, but found the passage of time seemed to lessen the amount I was willing to tack on, and sometimes I forgot, so even though I hate to be like the airlines and nickel-and-dime the cliient, they don't seem to mind paying on a current basis for the service provided.

[Peachie]

Free Electronic Filing

When I took a look at my fee structure for this year, I found that I had done a mainly 15% across the board increase for most forms, reducing only a few. I found when I went to free Electronic Filing a few years ago, no one complained. I, of course, have tried to build EF into my fee structure and to highlight the Free EF aspect of my business.

There really are many rising costs built into tax prep for home based preparers. I know store fronts have great overheads as well, but I've never owned a store front so am only speaking from what I know. I feel sure I will be ok with the fees I've decided on, but I won't know until the season begins. I will make adjustments if I need to.

I always loved being home so I could control who comes in the door and that once the bills were paid--they were paid. I have learned so much better now that I pay closer attention to costs.

Reading the posts and comments here assure me there's no right or wrong way to run your business. You do what's really best for you and the clients you serve. However, it's nice to have constructive input from so many on this forum. It allows me to think about changes and what they can or cannot do for me amd the clientele I serve.

Peachie

[Nashville]

Don't think so Harland

Infation for last year was about 3.6%. Prior to that for about 3 years it was more or less flat.

This is what the government was saying about inflation. I wonder how many of them go to the grocery store. Or ANY kind of store for that matter.

The apparent discrepancy probably is attributable to the decline in housing, which would make the overall inflation rate appear "flat." Problem is, how many of you are actually LIVING in a cheaper place to take advantage of this decline?

All things considered - removal of goods and services without a price decline, reduction of size due to packaging without a price decline, and in most cases a downright spike upward in selling prices belies any real govt claim that we had "flat" inflation for 3 years. Worked out just fine for them, freezing social security benefits and other govt cost linked to the COLA, but even with such a freeze, when it came to withdrawing for medicare they maintained that medical costs weren't "flat."

[superman]

Fee Increase

I was thinking about increasing my fees now I know for sure that I will. I may do a straight 5 to 10 dollar across the board or a percent have not decided yet. Last time I did a fee increase was 3 years ago and it started out as a 10% increase but by the end of the year for all of my late filers I raised it to 15%. The longer you wait the more you pay right? Not one person complained and that made me think I was not charging enough so time to raise the fees again.

I just heard on Clark Howard that Wal-Mart is doing the free thing this year. I will NEVER compete with free and that is all there is to it. Plus who wants the free crowd? Last year I had a client call and they said they were going to the block for the free I bid them good luck and will see you soon. Sure enough the next day they came in and said that it was not free and they had to pay to get their state done so my price was still better then FREE. My biggest mistake that I made was underpricing myself when I first started out and 10 years later I still am making up for that mistake. I learned over the years people do not always respect the cheapest places and most people do not want the cheapest price anyways they want good service and someone that is up to date on all current tax laws.

Have a great year and thanks for this forum it always helps out the one man shop.

Superman

[BP.]

FREE, FREE, FREE.......is what I am hearing.....

Yes but the fine print I heard said the only limited-time-free-thing is the 1040EZ; other forms like EIC or state are not free. Disappointed clients.

What to do is the question?????

Try to ignore it and focus on the reasons your clients love you and then try to keep doing those things well. Some consumers might respond to a marketing strategy, but there are people who don't want to feel tricked, but do need YOU.

What do you think?

[BP.]

Have you been to a tax seminar in the last 10 years? Ever notice how old we are?

I noted that as a main take away this year . . . ugh!!

[BP.]

I am finding that I am needing to bill extra for "consultations" rather than trying to incorporate a lttle extra work during the year in the basic tax preparation fee, or just a tax question now and then.

That does happen. So are you saying you bill extra for "consultations" at the time of the consults?
Or at tax time on top of your basic tax preparation fee?