$75 Per Hour Tax Prep

[ATSMAN]

Local CPA is advertising $75 per hour billing rate with 2hour min. for Tax Prep. She gives examples of an average charge for MFJ1040 (2 W2, 2 1099-Int) approx $150 to $175. With Sch C $250 etc.

You have to upload all documents or mail them. First consultation (30 minutes) free.

Is this a competitive price for the North East region?

[spanel]

I dont know about the region... but your example is a simple return non sch A. Would take about 15 mins to prepare (2 hr min is how they get you) and they are asking for $150-175.

I would say those prices are in line for a CPA office

Chris

[kathyc2]

The total cost doesn't look out of line, but the way it's presented is wonky and totally misleading. No way a 2 w2, 2 1099int return takes 2 hours. Max would be 1/2 hour.

Interesting how people have different ways of justifying their value. I had lunch with another CPA couple of months ago and she was shocked when I told her that most simple returns I do with clients at my desk waiting. She asked if they don't complain about price after seeing how little time it takes. Very few times that has happened, and when it does I tell them that they are buying my experience and knowledge, not my time, and they are almost always fine with it.

[ATSMAN]

>> The total cost doesn't look out of line, but the way it's presented is wonky and totally misleading. No way a 2 w2, 2 1099int return takes 2 hours.

i agree with you and the fact that she has a 2hr. min covers her for at least $150 even if it takes 15 minutes to do the return. I think by saying it is $75/hr billing rate she is putting her competitor CPAs on notice who have a much higher billing rate. I just did a tax return of a new client who was paying $225/hr rate to his CPA.

[Twin Turbo Z]

The total cost doesn't look out of line, but the way it's presented is wonky and totally misleading. No way a 2 w2, 2 1099int return takes 2 hours. Max would be 1/2 hour.

Interesting how people have different ways of justifying their value. I had lunch with another CPA couple of months ago and she was shocked when I told her that most simple returns I do with clients at my desk waiting. She asked if they don't complain about price after seeing how little time it takes. Very few times that has happened, and when it does I tell them that they are buying my experience and knowledge, not my time, and they are almost always fine with it.

Heck. When I see the Dr. or NP for a checkup its $120 for 15 minutes. So its easy to justify. We too have a few sit downs that take 15 minutes to do and then spend another 15 minutes talking about life. Not one complaint.

[Lion]

Are you talking about the NYC tri-state area or are you talking about Maine? I'm in Fairfield County CT, and don't see anyone with only two Forms W-2s and 1099-INT, even with a Schedule C. So, it'd be bait and switch. My married clients have about three W-2s, a C dealing with the new SSTB, two or three states, a couple of PTP K-1s, maybe three brokerage accounts with 40+ pages each, childcare &/or college expenses, charities including items to Goodwill, computations re the best way to handle SALT limitations, and so much more. I don't quote until I see their prior year returns and current year documents. If someone appears to be shopping prices, I say that my fees START at $500 and let them hang-up!

[WICPA]

When I take on a new client it usually takes me fifteen minutes to go over the Engagement Letter verify address, birthdate's etc. Then I review at least one years previous returns so even if it is a "simple return" you still have non input time so I think the price is fair and much cheaper that H&R in this area. What if they have children and the you need to fill out 8867? Personally, I would not advertise like that. Too many variables in what comes in.

[Anarchrist]

$150 seems ridiculously cheap. The minimum fee at the small CPA firm I worked at 22 years ago was $150. For W2 income only, https://www.hrblock.com/tax-offices/upfront-pricing/ indicates Block's fee to be $118.

[ATSMAN]

I think the marketing strategy is to price the hourly rate below the average and build on the time. So a complicated 1040 that Lion mentions may be billed @ 4 or 5 hours and get the same total fee but when you were selling your service the client heard $75 per hour and chose you compared to $500 that shocks them!