Fees poll

[Black Bart]

Oh well; let's cheer up! I didn't mean that everybody here was an "unexciting" person. No doubt some of us could be mistaken for Brad Pitt's or Angelina Jolie's stunt double.

So; about fees. I can't think of a good way to do this because there's so many combos of forms and such a wide range of fees by region, etc.

Well, anyway I'm trying something. If you want something different, feel free to jump in anytime.

[Eagleman]

Fees 1040a/b

My Fees always include the State of Ohio and Local tax return. For a 1040 A and B
the fee would be $ 125 - $ 145 depending on quantity of work and how long I have had the client.

[Joe Btfsplk]

Fee charge

Fees would vary if both State and Federal forms are required. Also, if a shoe box full of receipts were involved vs a single page recapping all information required.

[Lion]

Fees

I'm in Fairfield County, CT, where CPAs won't touch a return for less than $750. So, my fees are a lot lower than theirs. But, an A implies a homeowner or someone with NY state taxes or unreimbursed employee expenses or...; and those usually need a lot of advice year round. If I go too cheap on the return, then I have to charge for all their off-season questions -- not easy to do if done mostly by telephone or email. Rather charge them enough for their return and give them a little of my time when they need it. Want them to call me BEFORE they do something and not hesitate due to billing them for every 15 minute interval.

[Chief]

Poll

76.00 to 150.00. Depend on length and amount.

[Bird Legs]

Welcome Back

Chief. You are looking good. Hope you are feeling well.

[Chief]

Chief

I'm feeling great. Going in Monday for a Doctor's checkup. Therapy should end soon.
Thanks.

[Unregistered]

Lion, what kind of return are you referring to?

Individul or business. I have several clients who are NY and CT transplants. I regularly see prior year fees in the $250-$350 range. Haven't seen an individual return with a fee that high though, at least not yet. The transplants are good clients though, because they usually come back for planning, investment and insurance services. And, they typically are a little more involved in the process, and they also refer all their friends who are inundating our area.

JoshinNC

[oceanlovin'ea]

Around $75

I would probably charge around $75, maybe a little more or less depending on what was on the Schedule A.

But it really depends on the client. My new clients I am starting off at a higher rate than clients I have had for a long tim.

Also the area we live in is a more depressed financially so some of my clients I have kept my rates low. It is so nice to be able to do that.

LF

[S T]

Form 1040 and A & B

Unfortnately, to define what a range of charges might be for a form 1040 with Sched A & B attached, leaves too many variables unadressed.

Now if the question were asked, a form 1040 client, with a Sched A that had only property tax, mortgage interest, "some" charitable without the form 8283 and little if any misc deductions, that would be one price range.

If you start adding in whether or not you need to add medical, a long list of cash donations, and the form 8283, and then the employee deductions(form 2106) that would have a different price range, on the higher side.

Sched B, would be the same, if only a few entries of interest income sources and dividend income sources, one price range, but a long list of income sources and several brokerage house statements or investment statements another price range, or add on charge. I had a client in 2005 that I listed over 50 different sources of interest, brokerage and individual 1099 DIV statements due to the various accounts, a large extra charge.

So I start with a base range for a relative simple 1040, with "Simple Sched A" (prop tax, pers prop tax, mortgage interest, and limited charitable contributions), a Sched B (less than 10 entries for bank accounts and investment brokerage) Range $175 - $225 depending on the client. Our phone quote for some one that will qualify to file for a Sched A starts at $185 and we are less than HRB in the area. that includes Fed and Calif, extra charges once again if an additional state. Other fees are added from there.

I receive referrals from Loan Brokers and Real Estate Agents on New Home Buyers, those particular clients on first time home buyers, I start the pricing at $135 again depending on circumstances!

This is a great poll, Bart!

Sandy

[Lion]

Josh

Hi, Josh. I take it you're in North Carolina? I dated a man in Charlotte for a few years; much cheaper down there. Beautiful, too. Around here, a CPA wouldn't touch a return for less than $750, even a 1040EZ. At Block or a little mom & pop office, you'll see business returns as low as $250. (I'm at HRB Premium and start business returns at $500 including CT.) Personal returns less than $250 are common, even the ones in the poll. And, with the "simpler" return in the newer poll, you'll certainly see prices less than $250. However, here in Fairfield County, the salaries are huge and so are the mortgages and the property tax. And, many commute to NY so have NY NR return and CT and Federal, maybe 2106 and B and D. I just did a 29 page Excel spreadsheet for Schedule D trades for a return (his smallest spreadsheet ever). Maybe one spouse is self-employed. And, they have K-1s and college tuition and are on the borderline of claiming their parents as dependents, so you have to compute that possibility every year. And, AMT kicks in and the phaseouts for everything, so you spend a lot of time explaining their return to them -- and then explaining it to the other spouse on the telephone when the first one gets home! And, recomputing their withholding or ES in the fall after they sell a lot of their stock options to pay for their daughter's wedding. Glad they get serious about saving after they retire to the south, because I don't see much of it while they're here. They put it all into their house and their children's educations. Then, they don't understand why their taxes didn't go down with their bigger house with the bigger property tax and mortgage interest and the huge tuition. (AMT, of course, and phaseouts, again.) I've had eight separate discussions re AMT with one client, mailed her several articles, and spoken to her grown son at her request, trying to convince her that her broker is doing nothing wrong, that it's her huge property tax that's triggering AMT. So, it's really the neediness and hand-holding that I charge for and not as much the complexity of the return, even though the Block formula for pricing revolves around the complexity.

[Unregistered]

Well, maybe I should tell my transplants to call all their friends.

I just don't see what "huge salaries" and mortgages have to do with a pricing strategy. I have clients who make $10,000 per year and clients who make $250,000 per year, but they get charged the same rate for the same forms. Just taking the notion that the cost of living is higher, so you can charge higher fees, is not my philosophy. But, you have to pay your bills too, adn the cost of living is higher.

AMT is crazy, and I have the same conversations with clients. Maybe something will happen one day (fat chance).

Thanks for the insight, I'll definately remember that when I get new transplants. I might even try to weasel out of them what they were paying "up north" before I quote an estimate, just to "stay competitive".

JoshinNC

[JON]

Huge salaries

and mortgages-there was a wise old man who once said "charge what the traffic will bear". I have always tried to follow that. It is not an exact science, but you should get a good feel for it. If you want to charge less I hope it makes you feel good. You are charging for YOUR time the most valuable commidty in the whole world and it has a limited amount.

[Lion]

Huge is relative

The huge salaries and huge mortgages often cause huge amounts of time to explain why the value of their deductions is shrinking. I charge based on the time and complexity of the return and associated meetings. But, my schedule A clients have many time-consuming needs, running their prices up. They can't even buy an hour's worth of their lawyer's time for what they pay me for their federal and CT returns, so I don't feel guilty about my prices. When a client pays $29,000 annually to have her stock accounts managed, I'm not going to charge only $150 to report all those trades on her return. I wouldn't be able to heat my office long enough to complete her return at those rates!

[Black Bart]

Fee & Principle

I just don't see what "huge salaries" and mortgages have to do with a pricing strategy. I have clients who make $10,000 per year and clients who make $250,000 per year, but they get charged the same rate for the same forms. Just taking the notion that the cost of living is higher, so you can charge higher fees, is not my philosophy. But, you have to pay your bills too, adn the cost of living is higher.

AMT is crazy, and I have the same conversations with clients. Maybe something will happen one day (fat chance).

Thanks for the insight, I'll definately remember that when I get new transplants. I might even try to weasel out of them what they were paying "up north" before I quote an estimate, just to "stay competitive".

JoshinNC

I'm not sure how to discuss this subject without giving the appearance of trying to come off like Moses on the Mount lecturing the errant or the "old hand" showing the ropes to the novice and I surely don't mean it that way, but...here goes.

Regarding fee structures; it seem to me that they involve so many factors it's hard to bring them all to mind. On the other hand, you may feel it's simplicity itself -- charge a set fee for a certain form and that's that -- a "Mr. Smith Goes to Washington" approach to fees rather than politics.

What's prompted the last few posts are your (sincere) reactions ("I just don't see what huge salaries".../ "...charge higher fees, is not my philosophy") to Lion's (candid) explanation of her fee structure. A couple of your remarks ("you have to pay your bills"/ "AMT is crazy") soften the blow a bit, but the implied meaning ("it's not right") is obvious and was nailed down with the final "zinger" ("...try to weasel out of them what they were paying up north...").

The question -- "why aren't you charging everybody the same fee?" -- almost begs the reply of another old saying which is "if you don't know; I can't explain it to you."

Jon's method ("charge what the traffic will bear") is sometimes the only valid way to get your just due and his observation ("time (is) valuable...limited") is absolutely correct.

Lion is saying that she's put a lot of time and hard work into something and she wants to be paid accordingly. Who can question the logic of that? Sure; lots of high-rollers would like to pay you $150 for hours of explanations, work, and hand-holding, but you have to "defend" yourself. For some forms on complex returns, just thinking about how to handle it is a lot more effort than others. It doesn't make sense to charge the same for a sale of five shares of Wal-Mart as it does for a 29-page Excel.

I haven't adequately explained what I mean about why you should take care of yourself with your fees and I'm not really sure I can. Trying to say what a "correct" fee is reminds me of that Supreme Court Justice's observation: "I can't define it, but I know it when I see it." Jon's right when he says "It's not an exact science, but you should get a good feel for it." That comes with the passing of time and the eventual realization that it's running out (usually begins to sink in around age 30) and you have to make the best of it. You may view that as a descent into cynicism and callousness, but it seems to me it's just a recognition of reality. I think your loyalty to "well-off" clients is misplaced (they'll use you like a dishrag and the more money they have the worse they are) and always, in the end, it's every man for himself. If you have doubts about that, ask your client (if push comes to shove) whether he/she is taking responsibility for that audit-discovered omission of income or if they feel "the accountant should have caught it." At that point, you'll begin to feel that you "didn't charge them enough."