Been a Rough Season !!!

[BTS]

I do not remember such a rough season as this year.  Well maybe the stimulus seasons.   But so many people this year forgetting documents !!  Interest statements, investment statements, social security statements.  And you call and no one ever answers the phone.  You leave a message and they call back and ask what you wanted.  Did you check your voice mail ???  No, they reply.  So frustrating.  Then they forget you need stuff and call and ask why its taking so long to prepare their taxes !!!  Idiot... your suppose to get me documents !!  I dont call then Idiots, but I sure a heck want to.  So many other frustrating situations.  Too many to list !!  

But something has to change.  We need to cut way back and weed out problem clients.  Been saying this for many years, but it has to happen.  Time to change our pricing and business model.  I think its time to loose all non 1040 clients and a few schedule C clients.  And pain in the arse 1040 ones.  We could raise our prices 30% and lose 30% in the process and make life so much easier.  And at a 30% price hike, we would still be under the national tax prep average.  We charge some clients the same we did 10 years ago !!  Some even beyond 10 years !!

But it has to change.  Getting old and just honestly do not need the aggravation.     Anyone else, have a crazy year ???   

[jasdlm]

It's really crazy.  I think we need to have a giant round table session (at Rita's burial ground ;)), or maybe a giant zoom call) just to discuss practice management.  I've been working 90 to 100 hours a week since the first week of February, and I literally am getting too old for this.  I feel like I can hardly push myself through this final week.  I have good staff, but it's still just too much.  I think others work faster than I do, and I need to learn efficiency steps.  Last year I did 730 returns including extensions.  This year, I'm at 525 so far and working as fast as I can.  Client documents are delayed, and everyone just needs to talk to me for '5 minutes'.  I feel like such a loser when I put someone on extension whose information was turned in during March.  I set my deadline at March 7th for a guarantee of no extension, and I have passed that 'check-in' date, but people are still really good at making me feel bad, anyway.

Thanks for listening.  Yes, I like cheese with my whine.

I do think some sort of 'trading trade secrets' meeting would be amazing.  I'd host you all in Kansas ... you probably don't want to come in August, though ;).

[Dave T]

Yes, agree with BTS. Long and frustrating season.

No call backs. Missing docs, etc.  

To top it off, it's snowing here in Western NY.  

[BrewOne]

I'm mostly 1040's now but the number of clients with complex K-1's has multiplied--Enterprise Partners in Texas (I think it's a pipeline) must have a very convincing pitch for the number of brokers in Tallahassee who put it in my clients' portfolios.  And I just did a Form 6781 for a client who I'm certain had no clue what their broker was up to.  So I simplified by getting out of corporate returns, only to have partnerships and 1040's get more complex.

Would be hard to specialize in estates when so few Form 706's are filed now.  I imagine it would be very hard to specialize in representation now.

Pricing is a tough nut--but if you're busy and someone new comes along, that's the time to enforce a minimum price.

[jklcpa]

Yes, a horrible season. Getting the information from people seems to get more difficult each year, and no one likes the price increases when all I've done is raise the price to just stay even with my increased costs. Increased aggravation to make less than before?  No thanks.

[Lee B]

Well since I have already raised my fees and cut back over the years, my tax season has gone fairly well

[schirallicpa]

38 minutes ago, Dave T said:

 

To top it off, it's snowing here in Western NY.  

Where in WNY are you.  I'd love to get together sometime and complain about the roads.  I'm in Wellsville.

[schirallicpa]

Every. Single. Return has had issues.  And I don't do very many basic w2 clients, so I expect issues.  But really a lot more issues this year.  I think we should just set up a zoom call with everyone and complain for a good solid hour - we're the only ones that understand our misery. 

[Lion EA]

An Unhappy Hour with a beverage of choice in hand.

Find Brenda C, CPA @bsuecannon on Tax Twitter/X. She has a scheduling scheme to spread out her work AND have the clients buy in so few "just checking when my return will be ready" calls. I just didn't have the time to put it in place this year, but definitely will before next season. She recorded her Zoom training sessions. Brilliant woman who put her years of experience to work for her and is sharing her methods.

I've been raising prices 10% each year since back in Covid when I read that the average CPA price increase was 35% that year. (Used to raise no more than 5%.) Although, a couple of the biggest complainers had me back off if I put them on extension to stop the complaining. I found a fairly local preparer to recommend when clients complain; he has 5 offices and can take on new clients. I haven't seen a check yet, but I'm to get paid. I've been encouraging attrition with my price increases and insistence on extensions to spread my work out all year.

Every return is more complex. Energy credits taking a LOT of research. Sell home and move to a new state, so have to allocate wages, etc., to PY returns. College kids working in 2-3 states and maybe an IC gig. I started getting behind when Covid began, and it just gets worse.

I'm also going to have 3 tiers of pricing. 1. Current price but fewer services, mainly only electronic copy and PAY for quick questions. (I've trained most client to use email for nonPII and quick questions, so I can answer when I have time and have a record to save in their electronic file on my computer.) 2. Price increase, at least 10%, for same services as now, but a limit on quick questions before charging. 3. Substantial price increase, adding more minutes of quick questions. Trying to guide clients to the middle price that puts a limit on free quick questions. Maybe Bronze, Silver, & Gold. Or, Compliance, Collaboration, & Concierge. Or, 1,2, & 3. Or, A, B, & C, if I could come up with titles starting with those letters, such as C = Concierge, but should B = Basic and what would A = ? A chocolate treat to the one who contributes names for the 3 tiers!!

Marchternity @MarchternityBot

Today is March 1865, 2020. It will never end. #taxtwitter

 

[JimTaxes]

 My clients are very well trained.. I have about 25 returns or so lined up in a day.. all scheduled.. the night before I call up each client on my computer.. answer all the check box questions about dependents, and other administrative aspects of preparing a return. I can get 20 % of the return completed before even seeing one document. 

I schedule every half hour or 45 minutes if I know they have rentals or self employment income.  Clients come in next day. all spaced out time wise perfectly. client comes in.. a brief hello and a welcome. they turn their tax folder over to me.. go through the docs in order of return.. W-2's, 1099s, SSAs.. etc.. then I double check all figures with my ten key, making sure all figures "tie out" to the program.. my clients watch this all on their own monitor.. so i explain as the return is being prepared.... no review at the end as the review takes place while return is being prepared.. print out.. they sign. gladly pay me.. i thank them. wish them well.. they leave very happy and if I timed it right my next client is walking in the door momentarily. 

[mcbreck]

Had a client today who "lost" $1.5m. Not that he lost $1.5 million in the stock market drop, he couldn't remember where it was invested to get me a 1099. When I asked if he still had healthcare through the marketplace he responded with a "you need that form every year?".

Had a lady call a few weeks ago and said she was ready to get her taxes done and I could pick up the docs on the way home. I get there, we meet in the lobby of her building and I ask "do you have some forms for me?" Her answer was No and thought I could figure something out.

Son of a client has learned from his secretary that his father's nursing home expenses were deductible, he declares we weren't claiming those and he wanted me to file amended returns as soon as possible for the last several years and I'd be doing it for free as I had failed to do my job. His sister (on the email chain) responds "We've been doing that for the last 10 years but thanks for getting involved now." That was a fun day.

Had a couple three weeks ago who had a household income of $350k and owed $3,700 on their federal and the husband didn't know how they were going to pay it. He wanted to know about how to set up a payment plan and the wife was steaming mad. When I mentioned they'd be getting about $2,000 back from the state and would almost certainly have the refund before April 15th, he still wasn't 100% sure they'd have the funds and wanted information on making payments.

 

 

[Tax Prep by Deb]

All I can add is Ditto to all the above!

[Dave T]

schirallicpa  I am in Rochester and yes the roads can be brutal as well as the property taxes, the annual heart break of the Bills and the long winters but I guess better then tornados, hurricanes and wild fires.

[BTS]

For survey reasons, what would you charge for this ?  Married couple with a 1040, one schedule e residential rental property, a schedule d with 10 stock sales with no basis reported to irs (each stock sales listed individually), a 1099sa and 8889 of course, 2 w2's (one for each spouse) and 2 children (no eic).  And do you charge one fee no matter if the file mfj or mfs ?  Or one fee for MFJ and one for MFS ?  

[Abby Normal]

17 minutes ago, BTS said:

For survey reasons, what would you charge for this ?  Married couple with a 1040, one schedule e residential rental property, a schedule d with 10 stock sales with no basis reported to irs (each stock sales listed individually), a 1099sa and 8889 of course, 2 w2's (one for each spouse) and 2 children (no eic).  And do you charge one fee no matter if the file mfj or mfs ?  Or one fee for MFJ and one for MFS ?  

About $500 if MFJ. Probably $800 for MFS.

[Lee B]

MFJ $595

[Lion EA]

I would start at $500 if MFJ and only 1 state, but probably start at $600 with the rental -- IF their rental records are in usable shape, so could be higher. More if I have to drag info out of them, for rental or any other issue. 2 returns if MFS, so I'd charge for 2 returns -- probably a very substantial discount on #2. But each return would stand on its own, so if only 1 had a rental, only that would would start at $600.

For new clients, I don't start less than $500. If an old client who's been paying $300 suddenly showed up with a rental, she'd probably be only $400 IF very good records.

New vent: Old client I've been trying to proofread yesterday and today, with lots of interruptions from hubby and other clients, has now contacted me NINE times since she UPS'd me her folder the end of February. I told her before she sent her info that most of my clients had already dropped off by mid-February, so her return would be prepped in April. NINE times! She just emailed to say, "Getting close to tax deadline..."

[BTS]

We have rental worksheets clients fill out for us, so we do not have to wade through receipts and documents.  Same with business and farms.  But based on the replies, we are currently about $265 for my scenario client.  If they filed separate it would jump up to around $340.  Hence my original post we could realistically raise our fees 30% and still be below the average.   We have client files from 20 years ago and its crazy how a client we charge $165 for now was only $35 to $40 !!  

[Randall]

I'm out of gas.  It seems to be more hectic this year but I don't know why.  Maybe some are getting in here later.  I'm not sure.  I told myself I wasn't taking new clients.  Then there was the son of a client, the daughter of a client, the parents of a client, fiancee of a client.  Whoa, I gotta learn to say no.

[Lion EA]

Raise your fees! Or else I'll send all my clients who complain about my prices to you. And, I bet they still complain about your prices!

If you're getting no price complaints, you're too low for your area. If you get a few, you're still too low. If you lose a client over price, you're close to a good fee structure. If you raise your fees 30% and lose less than 30% of your clients, you're in good shape. Then raise them a smaller amount again the next year!

[jklcpa]

I would be in the $400-500 range too, depending on how much work I had to do on the rental and basis of stock. If the basis is printed on the broker 1099, that is less work than if the client brings in basis from an inheritance or older purchases where they've changed investment firms, etc.

I had one that I started to list in the complaint topic and changed my mind. The guy did not return to me this year because I charged him $800 last year.  He'd been a client for more than 10 years and I cut him big breaks on the calls and projections, but not on the returns themselves, and I still undercharged him. He also owed about $60K on the federal alone because he has huge bonuses and never calls, and does stupid things like using retirement distribs to purch the beach property, and underwithholds or has no withholding on that income.  Tax prep and other work included were for:

• high income earner W-2, so also had Medicare add-on tax, but not even $1 of interest or dividends so no NIIT,
• Sch A with SALT and mortgage limitations,
• sold 2nd residence which also had extended calls to fill out the form to avoid the state tax withholding at settlement,
• purchased another beach house, this one as rental but with lots of personal use, and didn't agree with explanation of expense limitations and argued that,
• 3 retirement distributions with partial rollovers and minimum withholding of 20% in the 39% bracket. These partially used for new beach house/rental,
• a complicated projection with 3 scenarios for a possible early retirement. Sent me a 200+ page booklet of explanations of these deals that he then demanded answers for within a day (the week I had the flu too!),
• multi-state as DE resident and working in PA, out of state credit
• and a daughter's return that was PY DE, PY NJ, and worked in Phila while living in each of those states, and then worked in NY city once fully moved to NJ.

So with all of that, it was parent's Fed, DE, nonres PA, 2 complicated projections, and daughter's Fed, part-year DE, part-year NJ, nonres PA, and nonres NY and NYC returns.  Nine returns in total.

His other adult daughter left too. Charged her ~ $500.  Similar BS with multi-state: She works in PA, husband in DE, they sold home in DE and moved to PA during year, has 2 children for the CTC and dep care credits with the documentation and due diligence, unemployment, std deduction for federal but each itemizing for DE on a separate basis, plus they live in a PA jurisdiction that has local earned income tax. So that one was joint Fed, 2 separate PA, 2 separate DE, 2 separate locals and figuring the out of state credits on those was a PITA.  

Not a word from either of them to know why they were unhappy. Those are the type I typically never take back because they were unhappy enough to leave and not give any courtesy to me after more than 10 years as clients and lots of free advice.  I hope they are happy with their new preparer and higher fees, and if they contact me in future I will joyfully and firmly say "NO THANKS."

 

[jklcpa]

There are lovely people I serve too though. I delivered a return yesterday to a client/friend of almost 40 years. She's 95 now in assisted living. Return isn't *that* complicated but has half a dozen 1099Rs, one consol broker 1099 package with only 40 page or so, the bigger main consol broker 1099 package that was only 60 pages, and a PTP.  We had a really nice visit and did some reminiscing. People like her remind me why I still do this work. 

[Lion EA]

One silver lining of PITA clients leaving is that we can spend more time with our lovely clients!

[mcb39]

2 hours ago, Randall said:

I'm out of gas.  It seems to be more hectic this year but I don't know why.  Maybe some are getting in here later.  I'm not sure.  I told myself I wasn't taking new clients.  Then there was the son of a client, the daughter of a client, the parents of a client, fiancee of a client.  Whoa, I gotta learn to say no.

You and me both!  And I am nowhere near these killer prices.  I am in this mostly for the sake of the clients.

[Sara EA]

If you haven't raised prices in 10 years (what were you thinking?), you will have to do it gradually, although yours are so  low you could start with 20%.  I'll bet that some of your clients react with, "What took you so long?"  Beware though; we had a client who came in every year with her check already made out so a price increase would be hard to impose.  

Different tiers for services with different pricing would be hard to keep track of.  We use a client contact sheet to record all off-season encounters.  Anything that requires extensive computations and/or takes more than a half hour gets charged.  If there are just routine questions or whatever but a lot of them, price of tax prep goes up next year. 

Not many of us have the nerve to get rid of our PIA clients, but those who do seem to be unanimous in saying what a relief it is and why didn't they do it years ago.  And it's better for our mental health to be the ones doing the firing instead of the clients firing us, as was the case for Judy.  In her case, my hunch is the parents got annoyed and decided to go elsewhere, dragging the kids along.  Those complex returns surely took a lot of time, so the silver lining is that she might just be able to go home earlier a few nights.