Average Tax Preparation Fees Hit $273 for 1040 and One State

[Elrod]

How much does your firm charge to prepare a 1040? How about other forms? What about the accounting and business advisory services you offer? When was the last time you checked to see if your prices were appropriate?

A new survey from the National Society of Accountants (NSA) shows detailed data about business practices, client fees, and spending for tax and accounting professionals. The 2016-17 NSA Income and Fees of Accountants and Tax Preparers in Public Practice Survey Report offers useful benchmarks for firms to use in billing, fee increases, engagement practices and other operations.

http://www.cpapracticeadvisor.com/news/12300090/average-tax-preparation-fees-hit-273-for-1040-and-one-state

[RitaB]

I think the number was $273 for a 1040, Sch A, and a state return.  Can't charge that here.  I often wonder if professionals surveyed respond "evangelistically".  I had a pastor who would joke about the conference exaggerating numbers.  It got to be pretty funny.

He started doing it, too:  "Well, evangelistically speaking, we had xxx in attendance for Bible School..."  Or whatever. 

He was counting all the parents and church members hanging out in the kitchen yakking and eating snacks and not working.  We all understood what he meant.

[Yardley CPA]

$273 for a 1040, Sch A and One State?  I find that to be high, but I'm sure others are charging at least that if not more.  For me, who prepares returns "on the side", that return would run between $150 and $175.  

[Gail in Virginia]

In my rural area, we would charge $115 - $130 for that, assuming no ETIC or CTC.  But I am sure if I lived in a large city with higher office and labor costs, my charge would have to be more.  And believe it or not, our prices are fairly high for this are.  Too many kitchen table preparers.

[Abby Normal]

250 in my area which is less than Block or Liberty. Rural area but we have more millionaires per sq mile than most places in the US.

I got a lot of little old lady clients one year because a firm in town set their minimum to 500.

[JMovichEA]

My dad used to tell me "Charge what the market will bear"

[Abby Normal]

In the past, I've called the local storefront tax shops and asked what a 1040 & Sch A with state would cost. Might be time to do that again. Gotta know your competition.

 

[Jack from Ohio]

I am not interested in new clients that call and the first thing they ask is: "What do you charge?"  I have a drawer full of one hit wonders...

[JohnH]

I never have decided on the best response to "what do you charge?"  

Maybe, "If that's the first thing you have to ask, then you probably don't want to pay it."

My next best is, "I charge by the question.  The answer to the first question is free, but there's a charge for every question after that." Then if they ask "How much for each question?", I'm home free.  My answer is "$100 each.  What's your next question?"

[SFA]

Our firm charges by the form and sometimes we adjust the price for that form depending on the number of entries. We have a minimum of $155 which includes a simple 1040, PA and local return. After that, the price can quickly reach $225 or more. We try to be consistent in pricing so that no matter who in the office prepares the return, the price is the same. Drop-off return or in-office interview, no difference in price. We have a similar pricing structure for business returns, but have an extra line item charge (hourly rate) for any work required to organize information before starting the actual tax return entry work. It works for us. We are busy and we all make a good living.

When people call asking about price, I have no problem going over it with them. Mostly they just want to talk a little and don't know what else to ask to get the conversation started. I don't mind doing a little telephone sales work to bring in new clients. With a little reassurance, most of the callers end of scheduling an appointment. Cha-Ching!

 

[ILLMAS]

All I know is that I don't charge  enough, if big box companies can charge XXX and people  don't complain, makes me think I don't know how to run a business.

[Lynn EA USTCP in Louisiana]

Illmas I think one reason people don't complain about the big box company fees is because they are getting refunds larger than their withholdings due to EITC, CTC, etc. - it's not their money to begin with, so what difference does a higher fee mean when in the long run they still have more $ in their pocket.  If I am totally off base here, please call me out on it. 

[Elrod]

5 minutes ago, lynn EA in Louisiana said:

Illmas I think one reason people don't complain about the big box company fees is because they are getting refunds larger than their withholdings due to EITC, CTC, etc. - it's not their money to begin with, so what difference does a higher fee mean when in the long run they still have more $ in their pocket.  If I am totally off base here, please call me out on it. 

Lynn, You may not be off base....But, he is....

[Catherine]

In my office, that 1040-A-MA return would be $175-$225 (or more), depending.  Depending on what?  Well, lots of stuff.  The big one being, did they give me everything at once or did I have to email them multiple times asking for the same %$#@ information?  And even that simple return might be harder than it looks - was the A interest and property tax only, or did they contribute to 23 charities that have to be investigated for political contributions mixed in with the list?  Did they refinance a mortgage and take out extra to buy a car?  Did they have one job all year or were there five W-2's from temporary jobs plus unemployment?  Did I get the Mass. 1099-HC along with the 1095-A?  

I won't give a price without seeing the prior-year return, and even then it is estimated high and given with the caveat that the price is subject to revision (up *or* down) if the situation is substantially different.

And I'm sure we've all had folks call asking for an estimate with "my return's pretty simple" (uh, no, or you'd be doing it on ttx online) - and then they "fail to mention" the three rental properties or day-trading as a hobby - and then get miffed when you tell them the fee is going to be more than the original quote.

[taxxcpa]

When someone asks "How much do you charge for a tax return," I tell them that most returns are $100 to $500.  They hear $500, and most don't pursue it further.

If they ask how much, they are shopping.  Someone once told me "That's pretty steep--last year I only paid $15."  Maybe they wanted someone who woud only charge $10.

.

 

[Lion EA]

I try not to give prices over the phone.  That Schedule A could be mortgage interest and property tax or it could be unreimbursed employee expenses where you have to teach them about business mileage/clothing/lunches.  Or "charities" as Catherine said.  And oh yeah can you compare MFJ vs. MFS?  I just rent out my Cape home when I'm not there, don't really try to advertise or anything, don't make any money on it anyway.  And, I don't make any money selling cosmetics either.  My wife and her girlfriend sell clothes but don't make any money on it, so you won't charge extra for that, right; yeah, they did form an LLC together.  And....  If they ask, I say returns start at $500.  That gets rid of most of the shoppers.  If their real question was what can you do for me/help me with/plan with me instead of how much does it cost, then the conversation usually continues and the final price might be much, much lower.

[Roberts]

My fee varies depending upon the complexity, the client's ability to pay and their personality.

Some people get charged $150 for all that.

Someone else might get charged $450. It all depends.

I hate to charge someone $200 if I know they are living on social security.

If someone is a jerk and a pain to deal with, I'll put up with them for 20 minutes if they are paying me the $350.

95% of new clients are of the belief their return is really simple, they get along great with their ex-spouse and life is grand - until you meet them.

 

 

[Catherine]

8 minutes ago, Roberts said:

I hate to charge someone $200 if I know they are living on social security.

I do, too.  But *everyone* sees the full charge on their bill, and then the discount.  Sometimes that discount is based on nothing more than me seeing how tight their finances are; sometimes it's based on how thorough they were in their preparation for me.  But everyone loves a discount!  I have gotten thank-you letters over the discounts.  But that's some of the reasons why I charge by forms and set that bar high:  so that I can give a break where needed, and not have to pad a bill to compensate me for not "Rita-hugging" a PITA client.

[BLACK BART]

On ‎2‎/‎1‎/‎2017 at 0:30 PM, Gail in Virginia said:

In my rural area, we would charge $115 - $130 for that, assuming no ETIC or CTC..

 

Me too - about $110 to $125.

6 hours ago, lynn EA in Louisiana said:

Illmas I think one reason people don't complain about the big box company fees is because they are getting refunds larger than their withholdings due to EITC, CTC, etc. - it's not their money to begin with, so what difference does a higher fee mean when in the long run they still have more $ in their pocket.  If I am totally off base here, please call me out on it. 

Exactly right.  You can charge what you want.  It's up to max $6,269 EIC (MFJ/ 3 kids/ earnings $14-24K). Add $3K CTC + all W/H back & you're pushing $10K. The used car dealers are rolling in dough.