Tax preparation fee

[taxmcp]

I am losing a client I had for four prior years to someone he says he was referred to who my client of four prior years says this someone will prepare his Individual tax returns for $15. What software and how many tax returns would a tax preparer need to prepare to be able to charge that low of a fee and cover the cost of their tax software (not including paper, ink, etc.)?

[TAXNJ]

Think you are lucky that they are going somewhere else. Sounds like you don’t have luck with the number four.

.....I am losing a client I had for four prior years to someone he says he was referred to who my client of four prior years......

Also, think you answered your own question.

[BOB W]

Be happy they are gone. You will never be able to increase a client like that just for inflation going forward. Especially if that client only thinks of price.. They are about to learn a hard lesson with someone who doesn't sign as a preparer.

[ATSMAN]

I am losing a client I had for four prior years to someone he says he was referred to who my client of four prior years says this someone will prepare his Individual tax returns for $15. What software and how many tax returns would a tax preparer need to prepare to be able to charge that low of a fee and cover the cost of their tax software (not including paper, ink, etc.)?

He was not a client but just a customer shopping around for the lowest price! I know it hurts especially when you are starting out and building your client base. But as others have suggested consider yourself lucky. You got rid of a future problem. I have been in business over 20 years and I have had my fair share of bargain hunters. Remember you are selling your "knowledge and expertise" not a commodity like gasoline or milk! We have tax preparers who give out coupons that they will match the next fellow's price with a written quote but I don't play that game.

[ATSMAN]

So, does Bargain Bob sign his name to the tax return, does he efile as (likely) required, and what about a state return??

In my town we have a fellow that hangs out at the local VFW, Elks Lodge etc and used his conversion van as a office an do tax returns for a flat $50 using TT. No signatures and paperfiled!

[WICPA]

If something sounds too good to be true.......

Let him learn the hard way.

[BOB W]

If I was starting my practice I would lowball my fees for the first 2 years and then slowly increase fees over the next 3 years. I call it earning respect through quality of work. Lowballing does not mean $15 or $50, but starting at $100 for a long form is lowballing nowadays. I must gain quantity first to at least cover the cost of operations.

Most of us may have started traveling to client's homes (back in the day), our only expense was a pencil, calculator and a small copier. Back then client's received IRS packets with forms according to how they filed in the prior year. I used pencil to fill out the form and then photo coping made the final copy like black ink.

The point I'm making is our business does not require much of an investment to get started so startup discounts should be how all beginning practices should start. Nowadays more dollars are required then back in my day. But it is still small compared to most other types of businesses. A "tax only" business today can get by on only $5,000, or less. Initial big discounts are a path to quantity. Quality clients come later. I slowly increased my fees, and to my surprise, I started to attract better clients as I lost some of my base due to fee increases. To this day I still have at least 100 of my 1980-85 client base. By the way, some leaving clients came back the following year after a disappointing experience with whom they went to.

At one point ( I guess 1990's) I was doing 500+ personal tax returns., now just under 300 personals and generating almost twice the income. All high end quality clients.

I became an Enrolled Agent in 1983.

[New York Enrolled Agent]

By the way, some leaving clients came back the following year after a disappointing experience with whom they went to.
.

You're kinder than I am. My clients are all told "once you're gone, you're gone forever".

[ATSMAN]

At one point ( I guess 1990's) I was doing 500+ personal tax returns., now just under 300 personals and generating almost twice the income. All high end quality clients.

I became an Enrolled Agent in 1983.

That should be the goal of a young person starting out in this business today. Eventually do less # of returns, but more complicated ones that get more fees! So once you have built up a nice book of business and you don't have to "retail or advertise" for new business you can strategically carve out a portion that you are happy with and sell the rest of the so called "unprofitable or PIA" clients to another young person starting out. I can say this with confidence because over 25 years back I was one of those young persons!

[Twin Turbo Z]

I

Most of us may have started traveling to client's homes (back in the day), our only expense was a pencil, calculator and a small copier. Back then client's received IRS packets with forms according to how they filed in the prior year. I used pencil to fill out the form and then photo coping made the final copy like black ink.

Remember the sticker on the IRS book they sent had everyone's social security number on them !! Those were the days.

[BOB W]

Yup... The sticker peeled off and you put it in the address section of the 1040 instead of filling the header out.

[ATSMAN]

Yup... The sticker peeled off and you put it in the address section of the 1040 instead of filling the header out.

You realize how America has changed from those good old days! Now you have call centers in third world countries trying to steal American's identities and wreak havoc on America and our Govt. takes no action to eliminate this threat! In the next 50 years these countries will be walking all over America!

[Twin Turbo Z]

Its funny. Most of the younger generation could not survive without computers and the internet. Let alone do a tax return by hand !! I remember ordering forms by the case directly from the IRS and State / States. But the Genie is out of the bottle, so to speak, and no putting it back. Well unless we have a huge solar flare and everything gets wiped out. Or the magnetic poles flip (which has happened).

[BOB W]

Gosh, is that all of the old timers on this board (4)?

[Lion]

Oh, I'm old, too. However, I've been preparing taxes (other than my own or for a company where employed) only since 1996, more or less. I do remember the peel-off labels, the tax books clients brought in, and learning a DOS tax program. That summer PTINs were announced, I jumped on my dial-up internet and grabbed one; mine has four leading zeros. One of my clients is in radio broadcasting and one of his affiliates blames all computer/communication issues on solar flares.