Charge for Kids Returns

[Bonnie]

Had one today. I've done dad's for years. 19 year old first time filing. Took 15 min from time he walked in door til he left and that was imputting all personal info as first time customer and 2 W-2s. I go over all paperwork with everyone instead of just handing them an envelope full of forms. So doesn't take long. Next year probably won't take 10 min beginning to end. Boy was happy, he hadn't planned to even file as he didn't think he would get a refund. So beginning of a learning experience for him. I'll probably be doing his return years from now. And I didn't charge.

[Snaggletooth]

Not So Easy

I maintain that the situation with working kids is normally far more complicated on both a behavioral and numerical level than the parents expect.

One typical scenario is the kid thinks he knows everything and fills out his own 1040EZ claiming himself. This often warrants a 1040-X. Another kid knows he can get a quick refund in January so he files his own return, and the damage is done by March, when his parents have their appointment with you. Another behavioral quirk is this idea that any mother can claim her children no matter what. So you spend time explaining why these parents with $35K income and 5 kids just simply can't claim a 19-year old kid with an $18,000 W-2. Then there is the eternal son who never leaves home and he is 26 years old and parents think Obamacare coverage allows them to claim him.

The preparer is often placed in a position to draw on his(her) expertise, but the parents are convinced that "here's Johnny's stuff - he aint got much." And they are not expecting you to charge Johnny anything either.

Get your fee one way or another. If you perceive it's not a good idea to charge Johnny for the "real" problem he may present, then charge his parents.

[zeros]

Normally Don't Charge for College Student Return

I normally don't charge for dependents but am rethinking it. A week ago, the parent handed me two w-2s for daughter and asked me how much I would charge. I said I could do it for free. Didn't notice that she had worked in two different states, either state that I normally do. Still working on it.

[Matt Sova]

Free

I use to charge a small fee. But, after doing countless 1040X's to remove the dependency exemption from a child's return because the client did not want to pay the fee I changed it to free. My fees are high enough to cover the cost of punching in a couple W-2's and kicking out a return.

[AccTaxMan]

For what amounts to a simple 1040EZ or 1040A for a dependent child, I will either do it for free (somewhat dependent upon level of tax return for parents) or charge a paltry $25 or so. I see it as a goodwill gesture and, being realistic, the time I spend on such is minimal. Parents appreciate it also, so it can easily be a win/win gesture for both sides.

Where I do draw the line is for a "complicated" return for a college kid, if such things as a Schedule D is involved, or even worse the infamous Form 8615. I still see red when my own children finally "outgrew" the need for the Kiddie Tax....and then a few years later Congress made them subject to it again as college students!!

Bottom line: Do what best suits your own personality and business interests!

FE

Me too, I charge minimal amount as a goodwill gesture to my clients. And sometimes I do it for free.

[taxea]

1st year for 1 W2 when TP is client is free. Second is 50% of my normal fee. When child goes to work I charge the full price. If original is done by client or child I usually end up having to amend both returns. They chose not to use my services for the original return so I charge both at full price.

I have found, over the years, that no matter how much you do for a client, free-of-charge, many of them have no loyalty to you. They are more interested in a lower fee than in your expertise.

[taxea]

I usually charge $25 - $35 (no state or local required) if the parents are good clients. Got one right now where the dad called with a "quick question" cause he was doing Junior's himself to avoid my ridiculous aforementioned rates. "It's really so easy," he says, "I'll just do it myself, but is his standard deduction really x?"

So, the next day he comes in to ask me another quick question about Junior's 1099-B. I told him I would rather do it for free than try to explain it to him. That shamed him into leaving it with me, "Oh, no, no, I will be glad to pay for it", and I will be charging more than $25.

My response would have been something like, "If you don't have at least a basic concept of tax law it is really not a good idea to do it yourself. I don't have the time to train you during the tax season. I do offer training in simple returns after the season for a fee and am happy to do your child's return at a greatly reduced price since you are such a good client and this is his/her first year filing. Let me know what you decide."

[Bonnie]

Guess my customers are not as complicated. 19 year old kid making couple thousand and getting back minimum that was withheld. Usually one or two W-2s no kiddy tax. And yes, I've cleaned up many where the kid already filed and claimed themself. Had one last year and when dad and mom showed up to file got a reject. Had to deal with all that so another good reason for me to offer to do it for them. Of course I did charge for cleaning up the mess she made by filing and claiming herself.

[taxea]

Did you charge your normal fee for the returns?

[Bonnie]

Charged normal fee for parents and charged daughter to do her amendment to fix the mistake she made. If she had let me do her return to begin with I would have done it for free. Like I said in an earlier post to this, it's a service I provide for my customers. I do their children's return free as long as they are students. Most are simple EZ returns that take me 5-10 min and less $1.00 for paper and ink. I'm seeing these kids grow up graduate and come and pay me to do their taxes. In my opinion a good investement. Most people would say I am way too nice in lots of my policies, but it works for me. My business grows every year and I think it's because I take good care of my customers.

[RitaB]

You don't say

My response would have been something like, "If you don't have at least a basic concept of tax law it is really not a good idea to do it yourself. I don't have the time to train you during the tax season. I do offer training in simple returns after the season for a fee and am happy to do your child's return at a greatly reduced price since you are such a good client and this is his/her first year filing. Let me know what you decide."

Isn't it interesting how two preparers can run their businesses completely different, and they're both happy and successful? See, this wouldn't really work for me, as I am as busy as I want to be in the summer with my monthly clients, and really don't want to train others to do what I make a living doing. Also, this client is NOT such a good client, and I really wouldn't mind if he mailed his stuff to you, let's say. But, just out of curiousity, if Junior showed up in June asking for training on dealing with his capital gain income, what is your rate? Do you also cover kiddie tax, and if not, that's pretty sweet, cause when it happens, you'll get to do the amended returns. Oh. OH... I see now how it works, you fox, you. Nice...

[Brian EA]

Original return-$25 or free.
Amended return, approx $50
brian

[erchess]

Time Charge

When I charged by the form I discounted the forms for dependent kids. Now that I charge for my time whether I'm typing on the return, doing research or sitting idle while I wait for them to get ready for me to work, the appropriate discount is built in. (I do most of my work at the client's home or office so I usually do not have the convenient option of working on another client while I wait for them to give me something they forgot.)

[marlenew]

I very much appreciate all the feedback regarding kids returns and will continue to charge approx $50 for a kid's return and when the kid is in college. If he has out of state earnings and I need to file Federal, 2 states, and a local the fee will be closer to $100. I do like the idea of a student discount and will start showing the regular fee minus the discount.

[AccTaxMan]

I have said I sometimes do not charge for kids return as a good gesture to my client. But I usually charge the kid if he/she works full-time and is not a dependent anymore, maybe on a discount.