Price Fair?

[SueBaby]

New client not last years to look over. Had a big cattle ranch his wife runs a real estate office plus on the side arts and crafts plus Avon.

I worked 2 hours pulling answers out of them plus printing out. With their 1099s they owed fed and state. My fee was $300. He was furious saying: "I have to pay in both places and now you charge me $300. It is way too high and highway robbery."

QUESTION: Was that fair? Or was it unreasonable?

I start doubting myself whenever someone like him gets mad at me.

[oceanlovin'ea]

It sounds like he was just trying to intimidate you. DON'T let him do that!

That sounds like a reasonable fee. It sounds like you did at least 3 if not 4 schedule C's.
Did you ask him what he paid his previous preparer? Why didn't he go back to him(her)?

Don't worry about it. From what is going on in your business this year, your time is at a premium. If he doesn't like it, he can go somewhere else next year.

Linda F

[SueBaby]

It sounds like he was just trying to intimidate you. DON'T let him do that!

That sounds like a reasonable fee. It sounds like you did at least 3 if not 4 schedule C's.
Did you ask him what he paid his previous preparer? Why didn't he go back to him(her)?

Don't worry about it. From what is going on in your business this year, your time is at a premium. If he doesn't like it, he can go somewhere else next year.

Linda F

Thank you for that. In "this kind of business" you win some and lose some. I hope I have lost him. I found out a long time ago everyone is NOT going to like you no matter how hard you work with them. THANKS

[JohnH]

Your price was too high

Your price was clearly too high. That is, too high for a cheapskate client who doesn't value your time and expertise. For these types, ANYTHING you charge them is too high. I'll bet you could have prepared the return for free and he'd still be complaining because he owes taxes. He can't complain to the government so he tries to take it out on the preparer.

If he comes back next year, before starting any work you should advise him that after he complained in 2008 you reviewed your records and discovered an error in your billing. The previous year's bill was much lower than you normally charge, and if everything is exactly the same he should expect the fee to be around $500 - more if there is additional work to be done.

The only way to deal with these clowns is to get it out in the open up front. Confront the fee issue up front and make them agree to it before you spend your valuable time on them, and if there isn't agreement you can both move on with a clear conscience.

[Zee]

Get your check, then send him packing.

[MRTAX4EA]

You Were Kind To Them

Whenever the subject of how much I have charged comes up, I try to think about what I paid a plumber last summer...

Since when does the amount of state or federal tax have anything to do with fees?

Taking your time and applying your experience and training, your price was more than fair!!

I would only hope that they disclosed everything.

[thomtax]

Similar situation

About five years ago, I had a similar situation. The wife brought in documents for preparing a return. She was very nice and pleasant to deal with. After about a week, the husband, a retired California police officer, came in to pick it up.

The first thing he said was I have never had anyone get the return done this quickly. Then he proceeded to tell me about how they should not have to pay taxes on the money earned in Canadian bank account. I was told about how he went into a doctors office here and demanded that he give him a prescription he needed. The doctor, having never examined him, told him that he could not give the prescription without an examination. His reply was that he was not there to help the doctor make money and demanded the pres. and according to him, he got it.

There were further discussions about how anyone storing up food for Y2K were fools, since he would just break in and steal it if he needed it. I don't think he appreciated my telling him that if he was breaking into my house to steal it he would get shot.

Then it was how if he got sick and could not pay for it he would just die, while his wife, a Canadian could go back and get free care. The U S government should be overthrown, etc.

I also looked at the last year's return and saw where the fee had been crossed out and cut into one half. While he was talking, I was taking things apart and sorting them. When he finished, I put his papers back into the envelope they brought in, stuck the return into the shredder and said "I'm just going to give your paperwork back to you. You need to go somewhere that you have more confidence in to get it done." He appeared a little surprised that his bullying did not work. My wife told me that she thought we were going to come to blows, but I felt that if he could not bluff, he was not going further.

I should have suspected something odd when I saw they lived 3 small towns away, yet used a PO Box in our town. Also, they had just moved here from a location that has a reputation a a hot bed for wanting to overthrow the government. Never heard from him again - thank goodness.

LT

[beverlyk@embarqmail.com]

Price Fair

Just posted a thread "wondering" Have had the same experience from a client. she now ower me $400.00. I was wondering the same, if my fees were to high, and that maybe there were better clients out there. It put my confidence in the toilet, but if there is a reward I just finished the course study "Choosing the right Entity" and I sure an glad she fired me. By the way her reason was I didn't teach her what she needed to know about taxes and S corps.

Bev.

[sea-tax]

I don't think it was too high, heck I would have charged at least double that. Remind the client that basing fees on refunds/or balance owing is I think illegal and therefore it does not matter how much or how little they pay in taxes , your fee is your fee, whether that get 10k back or owe 10k.

[veritas]

Avon...

I would charge $300 for that alone.

[oceanlovin'ea]

Speaking of Avon

I just had a new client come in and drop off her Avon statements for the year. She said she had gone to another man and he gave her the statements back and told her she would have to go back home and total them up. She said she didn't know how to do that.

So she came to me. I told her that normally people do come with their own totals but if I did it for her it would be a while before I could get her return done and it would cost more.

That was okay with her. We will see when she gets the bill.

Linda F

[JohnH]

lt will be too much

I'm betting that whatever you charge, the response will most likely be "I had no idea you were going to charge me THAT much!"

Then, in a slightly different version of the cattle rancher response, she will point out that you're charging her more than she made on Avon (they almost never make any money anyhow), and she just doesn't see how that's right.

You might have a little success in showing her how the fee is tax deductible, since that's the ploy many of the cosmetics & other home-based business promoters use to justify ther fact that their reps keep losing money - you lost money, but you get to deduct it.

[Jesse]

.............., she will point out that you're charging her more than she made on Avon (they almost never make any money anyhow), and she just doesn't see how that's right.

You might have a little success in showing her how the fee is tax deductible, since that's the ploy many of the cosmetics & other home-based business promoters use to justify ther fact that their reps keep losing money - you lost money, but you get to deduct it.

Isn't that the point - to have a loss to claim against your income. Mary Kay I believe to be the worst - they preach on how you can write off EVERYTHING and how this is going to make you money in the long run by saving the tax dollars.

[mblatour]

this is humorous to me.....

because I recently gave up my Avon business. This is my 4th season preparing income taxes and I also sold as an Avon rep from 2004 through 2007. I am still technically a rep, but I don't sell at all. I started with one customer; my grandmother; the only reason I even agreed to sign up as her 85 year old Avon rep was "retiring" and she needed a new one. I grew my "business" to over 125 stops. I won an award my first year for "the best new performer" in total sales (out of 350 women in our district). I also received an award for the 2nd place "highest sales increase" over the previous year in our entire district.

I sold about $21,000 worth of Avon a year. You want to know how much I MADE??? Squat. I kept track this past year to see how much time I was putting in, versus how much money I was taking in. I paid for the items I bought and that's about it. No joke. Most of the reps spend any and all profits they ever see. I kept my purchases to $10 here, $10 there (I am a penny pincher).

I worked hard at it too. My route alone took me over 9 hours to deliver (on a good day) and I did that part of it every other week.

I am extremely organized and kept very detailed records of my business. Every penny. I put countless hours into getting everything ready for my taxes. Most of the reps don't have a clue! I attended all of the monthly meetings for the first 3 years and I can tell you for a fact that over 3/4 of those ladies (mostly elderly), don't know the first thing about organizing their business records, and they don't care. They don't do it to make money; they do it for a hobby; to shop; to socialize.

I was NOT the norm. I was the youngest rep selling at the level I was (by about 25 years). Most of these gals were older than my grandmother. I tried to make a business out of it. I tried to make money, but it just wasn't there. Maybe in a bigger city, but at least not where I live. I turned over my entire route to another rep out in my area. She has since been so overwhelmed that she's considering quitting. Why?? She said "I'm just not making any money". When you live in a rural area and deliver in a 20+ mile square radius, it's awful tough to even afford the gas.

Whomever said the part about the deductions in a previous post was right. It was a deduction for us. I was able to have a loss my first year of around $1500. Second year around $900, and third year $300. I could show that I was actively growing my business. I was actively trying to MAKE money at it. Selling $20,000, doesn't mean making $20,000. That's where a lot of new reps who sign up get confused. You have to see what's left after expenses like $12,000-$15,000 in your cost on the products (after your 25-45% discount on the items). You pay for all the brochures you deliver every other week (I bought 200-400 each time at $.13 to $.19 each). Then there's your office supplies, postage, advertising, gas, website fees, order processing fees, discounts to helpers, and on and on. You tell me how there's money to be made there?

My district manager (and recruiter) sold at the 2nd place level in our entire district (nearly $60,000). She was making about $3,000 a year tops. She lived and breathed Avon, day in and day out. It was ruining her marriage (as I saw happening with many of the reps).

I might be off subject here, but all I am saying is that I totally see why we as tax preparers should charge so much for the prep of these types of returns. We EARN it. But I can see why these people freak out at the cost; they don't make anything. Yet it is their choice to do so. Now I'm staying on the money making side. Goodbye Avon. Thank god (I'll still keep ordering my skin cream to keep me looking young-smile!!).

[FEDUKE404]

Run, Forrest, Run !!

As a couple of other psychic posters have stated, I probably would have charged at least $300 just for the Avon consideration.

Years ago I learned that in most cases Avon/Amway/Mary Kay and their ilk "owners" fall into one of two categories: 1) their records, if any, look as if they were prepared on the way to the office or 2) they have very nice records and then think they can deduct everything.

The mind set is generally "I CAN deduct that" closely followed by "How in the world can you charge me so much for so little income?"

FE