What would you charge for this???

[manyhappyreturns]

Hi, a client of mine is balking about my fees, and I think I'm being way generous. Here's what is involved: Schedule C including COGS for buying, building on, and selling properties. In 2011 he sold two properties, and for each one I had to make a special trip to my office in the off-seasonto meet with him to prepare a CA state property tax withholding form. His wife is disabled and receives SSI, and he has 2 dependent children, so he is claiming CTC as well as EIC. The year before he only had one property, but he had 3 dependent children that year, and he managed to get maximum EIC. He said he used some of his savings to live on, so it was conceivable that he supported them all on his low income. This year with the 2 properties his income is quite a bit higher, and therefore the EIC is quite a bit lower (also due to the oldest child leaving home), so I'm thinking he is going to be upset about $2,000 less of a refund, and be more inclined to gripe about my fees.

Last year I charged $286 and he thought that was excessive, so when he called this year and begged for a discount, I told him I'd do it for $250 but no lower, and he griped about that! I told him he wouldn't find anybody else in town that would charge him less than that, so he did come in. Now that I have the work all done I'm anticipating him griping about the much smaller refund, and that will surely open up again the discussion about my fees. It seems to me that $250 is an incredible deal.

Any input on this would be much appreciated. Thanks!

Linda

[KC-CPA]

$250 is a fair and generous price... go to one of the main chains and see what they charge, it would start at about $300.

I think a fair price would be $300.

[origun]

$400 +

I'm pretty sure HRBlock (at least the corporate office where I work) would charge over $400 for this, probably more.

[DTS]

$$$

Between $475-525.

[JohnH]

I'm thinking you need to tell him what your fee is and not worry about what others might charge or what he might think. You're not going to convince a cheapskate of anything - he'd let you do it for $5 if he could bully you into doing so. He's probably accustomed to bullying his subcontractors and suppliers, so you're just someone else in the long line of people he badgers.

Stop trying to make him happy or hoping to hear him agree that you're being fair - It isn't going to happen. He's already in your head and you're the one who let him get there - it's time to get him out of your head, and maybe out of your office.

[geekgirldany]

$250 is extremely reasonable and yes a chain would charge more.

If he begged for a discount and still fussed about the $250... instead of saying "he wouldn't find anybody else in town that would charge him less than that". I would have and I have said, "You are welcome to go to another tax preparer if you feel I am charging you too much".

Some clients would still come in and others apologized. I had two who did leave last year and I am glad they are gone.

[joanmcq]

yup, same here. I had one in my office the other day that started haggling after asking why I couldn't do the return right then and there (new client). And he didn't have all the info I was looking for. I told him my price was more than fair, and I wasn't budging.

He took his stuff & left.

[KC-CPA]

One last item - fees should not be dependent on the taxpayers refund or tax liability, your hard work and knowledge is not based on their tax problems and if anything tax problems should create more fees for you.

I have found being confident in my pricing brings a benefit with or without the client.

[manyhappyreturns]

Thank you so much everybody! I'm now ready to face Mr. Badger, and if I lose him as a client over this, I'm thinking it will be a relief actually. He's kind of high maintenance, and I'd rather spend my time doing returns for "dream clients" -- ya know, the ones that bring their stuff in, wait for me to call them when it's done, then we meet to sign papers, and they pay me, and we all say, "okay, bye, see you next year!" This is only my 4th year in business, so I don't have quite enough dream clients to pay all the bills, & that's why I do all this stressing over the nightmare clients.

[ttbtaxes]

There was a time when H&R Block was a discount place. Not anymore. Your fee is your fee. Don't worry about what the client will think. If the client thinks it's too much, there's the door pal and have nice life.

We, in the tax prep community, don't charge enough. This year you have the EITC preparer scrutiny. That's worth jacking your fee up for. Personally, I will not do any client who has an EITC.

As far as I am concerned, $250 is the starting point for someone with a single W-2 and some interest income. It goes up from there.

Don't ever discount your fees unless it's done for charity purposes in the case an elderly person who needs help and you're doing it for that reason.

[Lion]

Invoice

Invoice him for your full fee. Put your discount, very clearly labeled in caps and bold and red, as something like

One-time only discount

Point it out to him and make it very clear what his fee will be next year if a similar return. Tell him specifically that he has a year to find a new preparer if your fees are not to his liking. Act as if you do not need him, that it's all the same to you whether he leaves or stays.

And, start telling all your dream clients that you have time for new clients, this year and next year, and who do they know that could use your services. That way you'll get more good clients like your current good clients. Maybe write them a "thank you for your business" card after tax season telling them you'd enjoy serving more nice clients like them.

[Burke]

All good ideas. I have done a client for years and he is a real penny-pincher. When he moved out of state and I had to do two part-years + all the retirement stuff he has, etc, etc. he called me and was irate about the fee. I stood my ground, said it was a fair price and cheaper than he could get elsewhere. Also told him to take the return by any HRB office and have them give him a quote. (They were advertising this service). Whether he did not not, I don't know and I never asked. But I am still doing him 4 years later, and he doesn't argue any more.

[taxea]

I agree with all of the above posts and I would tell him that I have no control ovet his refund because it is based solely on the choices he made during the year.

[snowshine]

I did a return this morning very similar in fact pattern to this -- he only sold 1 house, child in college had education credit -- and we charged him $561. I work for HRB (in a Premium office so our fees are a little higher than the retail stores, but not by all that much).