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Phil, I think we all understand that you are trying to get some numbers that can help you decide compensation or whatever. We also understand that this is a common approach among large businesses. The key word here is "large." Walmart and Home Depot need to work with numbers like you are seeking, because over huge data sets trends and meaningful means can be discerned. Block sure does it. Maybe a better place to post your question is on an HRB message board. People who work there are very conscious of the number of returns they have prepared in how many hours. (In my years at Block, I found them to collect so much data and analyze it to death a million ways that it no longer meant anything. Does it really help to know how many clients either completed their return or walked out between 10 and 11AM on Thursdays in each district in the region? Data mining can be helpful or overwhelming if attempted to the extreme.) I am an employee at a CPA firm, and I have no idea how many 1040s I prepared this season (with all the extensions, I'm not done yet). I get paid a nice hourly wage. I also do a lot of work my colleagues and the owner do not care and/or know how to do. For example, I do most of the research and all the legal research (Code, Regs, court cases, etc.). I do the returns with 12 rentals or 18 partners. The boss and I share those with 10 K1s from PTPs, but I get the ones with 12 brokerage accounts. I also get those clients with complex returns who actually want explanations for every number on the return. None of this means I can do these returns better or faster than anyone else, but just that I will do them with care and patience. My boss just thinks it's a better use of his time to pay me to do this exacting work than do it himself. (Right now I'm working on amending 8 years of returns for a client in the voluntary foreign account disclosure program and just completed THIRTY TWO Forms 5471.) So how much should I get paid?

But, you did get info, and more importantly, you seem to have had the info you need all along. We don't know anything about your overhead, etc. You are the one who will have to do the math to get the ratio you want for your business. If you want 1/3 to go out as compensation to your employees and the other 2/3 to stay with the company to cover your overhead and your own profit, you can make that happen. Only you can decide how to divide that 1/3 based on your assessment (the only one that matters) of the value of each of your employees.

With apologies to all the men here............... Making The Marriage Choice A wealthy man decided it was time for him to get married, but he was having trouble choosing among three likely candidates. So he gave each woman $5,000 and watched to see what they do with the money. The first does a total makeover -- she went to a fancy beauty salon to get her hair done, buys new makeup and several new outfits, and dresses up very nicely for the man. She tells him that she has done this to be more attractive for him because she loves him so much. The man was impressed. The second went shopping to buy the man gifts. She gets him a new set of golf clubs, some new gizmos for his computer, and some expensive clothes. As she presents these gifts, she tells him that she has spent all the money on him because she loves him so much. Again, the man is impressed. The third woman invested the money in the stock market and very quickly earns several times the $5,000. She gives him back his $5000 and reinvests the remainder in a joint account. She tells him that she wants to save for their future because she loves him so much. Obviously, the man was quite impressed. But how did he choose which one to marry? If you don't know the answer, you're not thinking. He's a man: he married the one with the biggest boobs.

What matters is how you compare YOUR employees as they are the ones you have to pay. I'm a sole proprietor with about 100 returns, but probably only 75 or fewer 1040s. None are less than an inch thick. Dozens of K-1s or 100s of pages of 1099-Bs or multiple states or multiple businesses or all of those. Changes each year. Just received a call tonight from a wife who'll probably divorce her husband this year. Many clients start and end businesses, trusts, change jobs, with all the questions each life change brings. The client that took only an hour or two last year might take two days next year while I train them on what information to track for that new change in their life. I don't think I'm slower than you. I think I have more complex &/or more tedious returns than you. Can you really learn anything from the fact that you do 100s more returns than I do? I can tell you how I price my returns, but that isn't what you asked. I have no employees to pay for tax preparation, so it's not that I don't want to share -- I have nothing to share about how I pay my nonexistent employees or how many returns they prepare. Someone else might expound re their employees, but be happiest with the one who calms their clients and keeps them coming back year after year and not the one who's the most "productive" based on number of returns prepared.

Well, the Injured spouse is one who, for example, married him/her AFTER the tax debt was incurred, and in that case, only the funds belonging to the t/p owing the debt will be seized. The innocent spouse is one who did not BENEFIT from the unreported income. It's not just that one of them did not KNOW about it, if, for example, they lived in a bigger, nicer home, drove better cars, etc, than their reported income justified, the IRS is not going to buy the innocence argument.

For me it's relationships. For instance, I just took a call from a client. She was surprised I answered so late at night. Glad I did. Another item from hubby's former business came out of the woodwork (a loan she thought he'd paid off, now calling all $40,000), and this may be the straw that broke the camel's back. As she talked about divorce, I explained what I would do, what I would not discuss and would with her maybe-soon-to-be ex, things like that. She was calmed by being able to reach me tonight. I'm in the midst of a big project for a biz client, but talking with her will keep a pricey client coming back. (Now, I have to manage to finish this big spreadsheet/report by tomorrow morning to keep my biz client calm!) Hand holding.

Our WOW is the quality, personalized and year round available service we provide. Reasonable pricing is second.

At the firm: 6 year round employees. 4 are preparers. 2-3 seasonal preparers - Feb 1 - Apr 30 ~3,000 returns. Returns from all 50 states. 60% mailed in. Most 1040. 60 S-corp, 28 Partnerships, 5 trusts, handful of estates each year. 2,000+ have schedule C. 700+ have rental properties. 500+ have more than 20 stock transactions, with about 50 that have 200+ stock transactions. 325 extensions this season. Since Jan 1, 35 responses to CP2000, 75 amendments for various reasons. 10 clients with identity theft issues. Hundreds of phone calls to explain information on the tax returns and answer questions. Office hours Feb. 1 till Apr. 30. Mon-Fri 9-9, Sat-Sun 9-4. Now if this helps you with your calculations, go for it. This has been the pattern and approx. numbers for the past 5 years.

This discussion has turned more than a little wacky. The structure that Phillip is trying to follow is a legitimate way of doing business, one that I have encountered before, which actually does work. Whether I or you would use this structure is not the point. Phillip is just trying to get some feedback. I'm fine with posting that its not something you would do. But when posts go into "attack mode", it's doesn't contribute anything to the discussion. Unless you are' trying to discourage people that don't think the way you do from posting here ???

Ok, I agree with you Pacun to a degree. We all take our breaks differently. Some check out their favorite sites on the internet throughout the day, others make personal phone calls, some cultivate relationships with the clients, and some do all of the above. (That would be me). At my age, I have built a practice around my lifestyle, and have attracted clients and employees who fit my business model with all of it's imperfections. I'm ok with that. That's the beauty of self-employment. Those who don't fit my style, move on. My bills are paid. There's plenty of fish in the sea, there's plenty of fish for me!

Too much to read. I worked 12 hours yesterday. Would have been 10, but I was listening to clients talk--about his new beard, her mother's recent illness, his wife's hospital stay and now his hip replacement; his car insurance; her employees disability troubles; answering if we like our new office, on and on. It was steady traffic and telephone calls all day. One client even brought us a bag of goodies from their deli and a new employee brought in the most beautiful rose from his garden for us to enjoy. Yes, working long and sometimes hard hours. Could be making more money, but hey, I had a great day!

I guess in an effort to have happy customers we forget that we are running a business. Businesses make money, otherwise you could run VITA, non-profit site and get some money from the IRS because you are running a non-profit tax preparation business. Does any one of us make as close as the president of HRB who doesn't even deal with PITA clients? Why is that? Because they admit they are in business and have marketing strategies. They have ratios, strategies how to get clients to the door, they have strategies on how to pay rent from 3 months of income. Some of us have difficulties paying our rent and we work like dogs most of the year. When I was taking math in college, I had some formulas that apply to a lot of business, but with time I have forgotten them. Now I run my business with the only direction to get 40 more clients each year by being a good counselor and by ignoring that I am in business and that I should not be wasting my time listening to my client's stories while I have other clients whose paper work is on hold because I am a good listener. My production ratio becomes very low, but hey, I don't have a ratio.