A Tale of Two Cities...or...

[Black Bart]

How Much Do You Charge For Out-of-state Returns?

Lady comes in yesterday -- brings daughter's two W-2s:
How much?
$45.
For federal and state both?
Yeah.
Okay.
Wait a minute (opening envelope); this is a Kansas W-2.
Yes, she lives in Kansas City.
Each state's different and our out-of-state fees are $40, so it'll be $85 total.
Oh.
It might be cheaper to get it done there as a resident.
Okay, I'll call her and check and maybe come back.
(Returns later) They want $125 for federal and Kansas, so go ahead.
Okay (opening second envelope). Wait a minute; this is a Missouri W-2.
Yes, she works one job in KC-KS and another in KC-MO.
That'll be another forty.
I'll call her about it again (leaves-doesn't come back).

So...question: What do you charge? Is my out-of-state fee out of reason?

[Bees Knees]

So...question: What do you charge? Is my out-of-state fee out of reason?

No, but I do think you ought to open all envelopes before quoting a price.

[JoshinNC]

$50 per state, home state free

Agree with Bees, and feel that your 1040 fee was too low ($85 minimum) unless for a dependent of a current client. If not a dependent, base fee is $85.

[equinecpa]

I can relate to your dilemma. I currently have a client who I quote $250 for partnership return (forgeting about the NJ state return which I find is one of the worst states to complete (and Part 100).). Then I start into it...had earnings from PA, Canada, NY and NJ.

I will now revise how I quote my fee estimates " with $250 for federal and between $50.00 and $75.00 for each additional state..." and I also add on unless there is anything unexpected to save me from hidden complications.

[JoshinNC]

$250 for a partnership?!!

I can relate to your dilemma. I currently have a client who I quote $250 for partnership return (forgeting about the NJ state return which I find is one of the worst states to complete (and Part 100).). Then I start into it...had earnings from PA, Canada, NY and NJ.

I will now revise how I quote my fee estimates " with $250 for federal and between $50.00 and $75.00 for each additional state..." and I also add on unless there is anything unexpected to save me from hidden complications.

I wouldn't touch a partnership without Sch. L for less than $450 and with a Sch. L for less than $700. Most of my partnerships are between $750 and $1000. Can I outsource some work to you and keep the difference?

[Black Bart]

Thanks for the tip,

No, but I do think you ought to open all envelopes before quoting a price.

and here's one for you -- wear your mittens when it gets cold out.

[Black Bart]

Gimme a break, guys!

Agree with Bees, and feel that your 1040 fee was too low...

Forty bucks ran her off. This ain't Aspen; it's Dogpatch.

[veritas]

Bart

Just a thought but how about promoting out of state returns? Use a somewhat lower fee to attract your new neighbors?

Here's a promo

BLACK-BART
Save money. Live Better.

[Snaggletooth]

Reality

Forty bucks ran her off. This ain't Aspen; it's Dogpatch.

I also practice in the rural south. 'Me 'n Bart know what we're talking about. There are people down here who will fill out a 1040 in pen and ink for $20. There are used car dealers who have bought e-file software and have someone prepare a return free if the customer will just buy a car. There are self-proclaimed "experts" who watch TV and believe the commercial about TurboTax bringing more knowledge than a CPA or EA, and they pay from $30 to $50 for "box."

There are also farmers and their relatives (when you include "relatives" that's about 80% of the population in my county), who believe that your taxes will be the same regardless of who fills out your tax return, so the preparer who charges the least saves them money. One very common quote is, "Ron can you do my income this year?" as if their bottom line makes no difference.

I understand the rest of the world (sometimes), too. You can't rent a building in the industrial northeast, midwest, or California, pay overhead, incur expenses, and survive by charging the same fees as 'me 'n Bart. I obviously don't know Bart's fee structure but I'm sure he has to deal with the same downward pressures that I do, and is all too familiar with the situations described above.

One of the common claims on this board is from some of you who claim to charge a special $100 PITA fee or more. And that we "fire" clients. Yes, I've had to do the same in extreme cases, but it is closer to the truth for me to state that I put up with the same duress that anyone else does who serves the public. Suspicious incomes. Bringing in brats that the parents think are "so cute." Waiting on information forever. People who talk on cell phones while we are trying to help them.

This is hard work even though we sit on our butt and work into the wee hours of the morning. And like the disco song, we "work hard for the money."

[Black Bart]

To tell the truth,

One of the common claims on this board is from some of you who claim to charge a special $100 PITA fee or more. And that we "fire" clients. Yes, I've had to do the same in extreme cases, but it is closer to the truth for me to state that I put up with the same duress that anyone else does who serves the public. Suspicious incomes. Bringing in brats that the parents think are "so cute." Waiting on information forever. People who talk on cell phones while we are trying to help them.

the above quote is the truth. I'll bet that "$100 PITA fee" isn't charged half as much as it's talked about here or, if it is, I seriously doubt that it's presented as such to the client. I've upped fees $100, but I've never looked anybody square in the eye and told them it's because they're a pain in the a**. Have you? You probably won't get it anyway because price is usually part of controversy -- basically you're just pricing them out of the office. As for "firing" clients, I never even heard of the term before I came on this board. As Snag says, it is resorted to mostly in extreme cases -- I put up with grouchy, cranky misers and rude ignoramuses and I think most everybody else here does too. I'm sure there's a sole bold soul (or two; or three) who lays down the law ("take it or leave it"), but I believe those tough practitioners are the exception rather than the rule. Paying clients aren't that easy to come by and most of us are hesitant about throwing anybody overboard without enduring hardships or sucking up quite a few complaints.

P.S. to Snag: Thanx for the support, and yes, I'm guessing our "fee structures" are very similar.

[Bees Knees]

Forty bucks ran her off. This ain't Aspen; it's Dogpatch.

I just paid a plumber $70 per hour to hook up a gas dryer and a couple of bathroom faucets. That's cheap for up here in mitten country. How much do they charge down in Dogpatch?

You worth more or less than a plumber?

[thomtax]

Bees

I just paid a plumber $70 per hour to hook up a gas dryer and a couple of bathroom faucets. That's cheap for up here in mitten country. How much do they charge down in Dogpatch?

You worth more or less than a plumber?

In my part of rural Arkansas, plumbers charge $85 per hour.

Apparently, based on going rates, I'm worth less.:-(

LT

[joanmcq]

I'm sure the PITA fee isn't listed as such on the invoice; may be a higher per hour rate, or just lumped in a total 'tax prep fee'. I don't often fire clients, but I think I just lost 2 new good ones because I refused to write a mortgage letter for them. Came down to what can I do to help my clients vs. how do I protect my *** and stick by my standards and integrity.

[Nashville]

Pockets

In stark contrast to the bucolic Dogpatch stories spun by the likes of 'me 'n Black Bart, there are small pockets of unbelievable economic wealth thriving in the Deep South.

Thomtax doesn't say from whence he hails, but there is a part of Arkansas where an $85 plumber would be hard to find. The extreme northwest part - north of Fayetteville and west of Searcy/Mountain Home is one such area. Of the 10 wealthiest Forbes list of USA citizens, four of them live in this area of the Ozarks. All four are children of Sam Walton, of Bentonville. Huntsville, AL is another veritable oasis in the desert of economic depravity. Highest concentration of certified Engineers in the U.S., home to more than 50% of America's rocket scientists, and an unemployment rate of 0.8%.

Plumbers in my town charge about $40/hr but they have to make 3-4 trips. I knew an old union plumber, retired from Philadelphia,who charged $75/hr (years ago), but he always fixed it the first time and was worth every penny. He would wink at me when I complained about his fee and say, "I had to get rid of my M.D. and go into plumbing where I could make some money."

"Y'all come!!"

[thomtax]

I'm not in the economic boom area of Arkansas, but live in small town that does not have a larger town any closer than 75miles. It is basically a captive market. The attitude is "If you don't like it, get someone else." Unlike with tax preparers, you cannot mail your plumbing problems to someone out of town.

A few years ago all of the plumbers collectively raised their fees to $100 per hour. This did not stick, but they only dropped it to $85. This is probably not legal, but it is the way it is.

LT