Fees for the upcoming tax season

[Jiggers]

It seems that everything is going up significantly:

My group insurance has gone up 25%.
My rent went up 12%.
Fuel costs have gone up 35%.
Postage is up 5%.
My dentist has raised fees 12%.
Groceries have gone up, way up.
and on and on and on..............................

What increase are you planning for your fees?

5%, 10%, 15%, more?, or no increase at all?

[fliszt]

I charge

by the form. I was contemplating a 2-1/2% increase since I work from my home office. I agree with you about the increases in basic costs just to live. But I think we have to look at what increases our business has undergone. Since I work from a home office I have basically no auto fuel increases to pass on. Stamps (maybe $300), groceries, etc basically do not affect my business costs. Health insurance is up 20% here. That hurts. And heating expenses I would guess will be way up. I think my charges are on the high end right now, so I don't think a 5% increase would be good, but the 2-1/2% increase I think my clients will absorb. I hope.

[JohnH]

About 6-8%

Right now I'm contemplating a 6-8% increase.

(Although there are a couple of clients who are on track for a 200% or more increase)

[BOB W]

Even if you work from home, your personal cost of living is still a factor in fee setting in addition to business costs.

[Joe Btfsplk]

Fee increase

Usually I leave the fee the same or raise it $ 5.00 or $ 10.00. Since I moved this year from the suburbs to Dallas, my gasoline cost is far less--a tank of gas lasts about two months.
My electric bill is much lower since I don't have a two-story living room ceiling any more, but my grocery bill has gone up.

The increasing cost of living is largely due to the declining value of the dollar. The best thing to do is to convert all your money into Euros, Canadian dollars or other foreign currencies. Maybe even the Mexican Peso is going to look good if this situation keeps up.

[ChEAr$]

tax prep fees

I last went up two years ago and vowed it would be my last, since i'm in a
"retiring' frame of mind.

Since then, however, stamps cost another 2 cents apiece, my rent's going up 50$ per
month Jan 1, utilities (water/garbage) went up 4$ per month last year, and with the
restructuring of ATX fees (no longer the 165$ or so option for ten business returns,)
I'll do everything via Taxwise, which means another $10 per corporate return.

Oh yes, I almost forgot; I deserve at least 2.3% increase.

So then, yes, basic fees will be up 5$ per client; maybe a raise in business returns
also.

[erchess]

My two cents

I charge by the form and in some cases by the section or even the line. I charge for time only if I feel that the client's taking control of the conversation or very poor record keeping made the process take significantly longer than average for a return of the same complexity. If the return requires me to make a significant out of pocket expenditure I pass it along but without a surcharge. Of course I charge a time charge for representation and for producing written opinions. I have not yet chosen my percent for the upcoming season but what I will do is pick a number and simply increase each charge by that amount. The exception will be my filing fees. I will continue my policy of passing along what I am charged for e-filing without any surcharge. I like e-filing because I think that it makes my life easier and so I have a $25 surcharge for paper filing a return that I could e-file...

[Joe Btfsplk]

E-filing surcharge

I charge by the form and in some cases by the section or even the line. I charge for time only if I feel that the client's taking control of the conversation or very poor record keeping made the process take significantly longer than average for a return of the same complexity. If the return requires me to make a significant out of pocket expenditure I pass it along but without a surcharge. Of course I charge a time charge for representation and for producing written opinions. I have not yet chosen my percent for the upcoming season but what I will do is pick a number and simply increase each charge by that amount. The exception will be my filing fees. I will continue my policy of passing along what I am charged for e-filing without any surcharge. I like e-filing because I think that it makes my life easier and so I have a $25 surcharge for paper filing a return that I could e-file...

Different strokes for different folks. Some people seem to find e-filing easier than paper-filing. I'm just the opposite. All the extra information you have to input for e-filing vs the extra sheets of paper you have to print for paper-filing is the trade-off. Since paper is cheap and printing time is short, I prefer paper filing. If the type of errors caught thru e-filing helps, e-filing might have an advantage, but I don't usually make that type mistake. My mistakes are usually something that won't be caught by e-filing, such as omitting a form or a portion of a form.

[Golden Rocket]

Professional Expenses

Since I became an EA two years ago, I've really had to absorb professional expenses. This year there were four days worth of seminars, plus travel. An easy $1000.

I'm having problems passing on these and other expenses. I am a much better and knowledgeable preparer because of this extra training and knowledge fulfillment. However, the preparers in demand seem to be those willing to forego all of this and just get big money back for John Q. Public. Nowadays, knowledgeable preparers can result in MORE tax, instead of less, for our clients.

I am very thankful for my customers. I have a retention rate of 95% including death, people who move, etc. Most of them are extremely loyal to me - and I do not jolt them every year with increases. I try to build in subtle increases which call for heavy fees when heavier expertise is required.

[Joe Btfsplk]

Professional expense

Since I became an EA two years ago, I've really had to absorb professional expenses. This year there were four days worth of seminars, plus travel. An easy $1000.

I'm having problems passing on these and other expenses. I am a much better and knowledgeable preparer because of this extra training and knowledge fulfillment. However, the preparers in demand seem to be those willing to forego all of this and just get big money back for John Q. Public. Nowadays, knowledgeable preparers can result in MORE tax, instead of less, for our clients.

I am very thankful for my customers. I have a retention rate of 95% including death, people who move, etc. Most of them are extremely loyal to me - and I do not jolt them every year with increases. I try to build in subtle increases which call for heavy fees when heavier expertise is required.

I'm in the same boat. My cost of license renewal, CPE, etc keep increasing. I can't pass on these expenses and if you are trying to attract clients, many prefer to go to the guy who will claim the biggest refund for them even if he does it illegally. Many people assume all tax preparers are CPAs or hold some other professional license. So they assume the guy who gets the biggest refund is the best preparer.

I also retain at least 95% of my clients but am not seeking new clients, so eventually my practice will decline to a point that the cost of licenses, CPE, software, etc. will not be worth continuing my practice. Since I'm well past retirement age, I can afford to let that happen. But if I were a young whippersnapper, I would be concerned by the competition from the Rapid Refund, RAL-type operations.

[Chief]

Prof expenses

I'm in the same boat. My cost of license renewal, CPE, etc keep increasing. I can't pass on these expenses and if you are trying to attract clients, many prefer to go to the guy who will claim the biggest refund for them even if he does it illegally. Many people assume all tax preparers are CPAs or hold some other professional license. So they assume the guy who gets the biggest refund is the best preparer.

I also retain at least 95% of my clients but am not seeking new clients, so eventually my practice will decline to a point that the cost of licenses, CPE, software, etc. will not be worth continuing my practice. Since I'm well past retirement age, I can afford to let that happen. But if I were a young whippersnapper, I would be concerned by the competition from the Rapid Refund, RAL-type operations.

Joe, I am in the same boat with you. I dont care to expand my customer base, have no concern as to professional expenses. This is a retirement activity for me mainly to stay active, alert, and meet some interesting people. I never want to compete with the rapid retund crowd as I have customers in my home or I go to their homes. To each his own. I am satisfied and happy where I am.

[Joe Btfsplk]

Keeps us young

Joe, I am in the same boat with you. I dont care to expand my customer base, have no concern as to professional expenses. This is a retirement activity for me mainly to stay active, alert, and meet some interesting people. I never want to compete with the rapid retund crowd as I have customers in my home or I go to their homes. To each his own. I am satisfied and happy where I am.

I would never have chosen a career in preparing taxes if I had to do it for a living. I spent most of my career working as an auditor, first for the Auditor General, USAF, later for the Texas State Comptroller and finally retiring as a "Senior Compliance Analyst" (a glorified title for an auditor) with a major oil company.

As a part-time business, tax preparation is OK, but doing it full-time would not be my cup of tea. Although there are occasional challenges in tax work, much of it is pretty routine compared to the type situations I dealt with in the oil industry. Of course, if I had major corporations as tax clients, it would probably be a lot more challenges..

[geekgirldany]

I am going to make it a policy each year to go up atleast $5 per return. I don't think that is to much to ask. I did it last year and actually had a few people mail me a check of what they paid me the year before. Even after I told them how much it was. I also need to charge for tax consultation. I have as part of my engagment letter that I will provide it at no cost during the year. But it has really started taking more of my time and I am not being paid for it.

I was just looking at my P&L and I need to cut down on some of these expenses. Try to atleast. If my EA CPE is going to cost a good bit each year I need to factor that in. Plus since I am actually making a little profit now I would like to buy more reference manuals. TTB is great but I would like some backups also.

I am lucky that I own the building so I don't have rent and I also don't have employees. If I did I would be in the hole. My health insurance is going up to $400 a month next year. Geez that gets my goat!