Fee increase

[JohnH]

Bees:

I like the way you think, my friend.

[DTS]

I have already raised most fees similar to Sandy, but I've been thinking I'd raise my base price about 3-5%, which seems enough for me. For the most part I'm OK with my prices as they are and clients are too, but every year I always raise a few items a little.

I have been wondering about what to charge on Form 8949. Not sure my old Sch D prices will cover the new form.

Would you share your thoughts on pricing this new form?

D

[JohnH]

Hourly Rate - IMHO the only rational way to price the 8949.

[Gretel]

I am adding to my original post. The year I did sent the fee increase letter was the first year I didn't have any complaints about fees. Sending this letter still didn't mean there wouldn't be exceptions, actually I had quite a few, so I also looked at each client's situation.

This year I plan major increases for clients with stock sales, minor for all other clients and I don't think I want to do any EIC tax return for less than $200 for new clients. I only will accept new EIC clients if their situation is pretty clear to me. I haven't made up my mind fully yet, kind of want to see who shows up.

[ChEAr$]

a couple of more points

1. No discounts. I've seen these on last years' bills in case of new clients. And my regular fees are usually less than other preparers' discounted fees. Giving a discount implies that I'm not really sure of my value to the client. Oh, and no referral fees either; just fair prices for all.

2. The form 8940 may call for a few more entries per transaction, but we can still duplicate brokers' statements as long as the columns match up. So not much change there I think.

3. As for number of preparers, Bees, we didn't lose any i think. They just didn't register, but will still be in the thick of things, either working in an office where another RTP can sign the return or gravitating to "self prepared" returns. You know, kitchen table types. (grin

[BP.]

increased regulation on tax professionals and the shortage of tax professionals,

http://www.irs.gov/newsroom/article/0,,id=252284,00.html

Plus increased demand for services? Today's IRS News Release on Taxpayer Advocate's Report to Congress.

[Burke]

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. These would be sessions in which I do quarterly estimated tax revisions for the self-employed, est taxes for clients who liquidate assets -- stocks and/or IRA's/annuites, as well as various and sundry things that don't have anything to do with their taxes, like filing for insurance benefits for a deceased spouse, handling pension screw-ups, other help with financial affairs. These are usually older clients which cannot handle anything on their own (or shouldn't). Even ex-clients call me when they get a letter from the IRS (those who have dropped out of the filing requirement threshold). I like to help,but.......

[Bees Knees]

3. As for number of preparers, Bees, we didn't lose any i think. They just didn't register, but will still be in the thick of things, either working in an office where another RTP can sign the return or gravitating to "self prepared" returns. You know, kitchen table types. (grin

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

The PTIN registration and e-file mandate was the last straw for many preparers who were looking for a good excuse to retire...which is exactly what many of them did.

[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?

[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.]

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?

[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

[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."

[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

[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.