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All right, I cuss a little, but I love Jesus. And here is part of your problem - clergy (at least here in my little town) sometimes come across as feeling entitled to more for less. My mother used to practically give away her work to clergy. I undercharge everybody, but I don't undercharge clergy more. I have no problem telling them I have a ministry, too. My ministry is feeding my kids. And my kids are leaders in church and everybody has a ministry, not just pastors. I was furious that my pastor talked a kid out of playing professional baseball because he was needed on the church staff. What???? You can't witness on the baseball field???? OK, sorry I got off on a rabbit trail there. And, yes, my pastor makes more than me. He can pay for tax prep - they gotta get over thinking we owe them something. Nobody owes anybody anything, and yes, a workman is worthy of his wages.

From the Tax Pro Today series:

JJ. I want to bring up one more thing. You need to talk to a REALLY GOOD SS Disability attorney. They only charge when they get the disability, and while it should not be this way, it often is true that the SS personnel do not 'play fair'. But faced with an attorney, they do react differently. And the fact is, it is not WHAT sort of injury it was, it is HOW IT AFFECTED HER. Regardless of how others may have been affected. Please do not just give up. There are so many being given disability for ridiculous reasons, any legit claim should be fought until you get it. As for the price issue, just remind clients that the ACA, on top of all the other changes, has made the tax software more expensive, so the fee increase is not really to make you more PROFIT, but just to keep up with your costs.

I have several hairdressers, and it really is mysterious to them not being able to write off the FMV of do-overs. Also, face value of gift certificates. Sigh. So, I quit telling them, and they think they're deducting them. Everybody is happy that way.

You will hate Drake. 2013 tax year I used both. I will not go back to Drake for any reason. Drake is not intuitive enough for me. 2013 I raised my fees 25%. (not yet to the 80-85% mark Tom used) I have 200+ clients. I had 1 client complain and two ask. 2014 I raised my fees an additional 16%. Still not to the 80-85% benchmark. I may have lost a few clients, but have gained several new clients that didn't even blink at my new prices. More income than 2013. When we price our professional services at Wal-Mart prices we hurt our entire industry and other tax professionals. I have chosen to stop doing that. I am now an IRS licensed professional with 18 years experience and have decided if my prices are the reason some left, I am not losing anything. In the last two seasons I have had a total price increase of 45%. If I lose some customers, I have less work to do and make more money. The concept truly does work.

Employers are paying "contractor" wages when the person should be an employee to: Not pay 7.65% FICA Not pay Unemployment Insurance (breaking state employment laws) Not pay Workman's Compensation Insurance (breaking state employment laws) Not pay someone to do the payroll reporting It has nothing to do with payroll being stressful. It is all about the money.

It already started this morning and I had already filed two returns before I went to the Dr with my hubby. "Oh, you must be so glad it's over!!" What part of over don't I get? Rita's boot, indeed.

4 preparers year round. During season we add 3 more. From Feb. 1 to April 14 we are open Mon-Fri 9-9. Sat-Sun 9-4. The rest of the year we are open Mon-Thu 8:30-5:30. During off season I don't work on Tue. Total filed returns for 2013 tax season was 2,903.

And how many preparers? And is this a year round accounting practice? I need to compare myself to everybody so my self worth can be accurate. Got my hair done this morning. Hairdresser, non-client, talked the whole time about her business tax return she botched. Yeah, I'm gonna do it for her since she is afraid of her accountant but can't leave him because he knows the ins and outs of her very advanced and mysterious income tax return. Man, the last thing I wanted was to listen to a hairdresser talk about taxes.

Agree, and its not just small employers, but also medium size and large size employers like FED-EX.

Adding to Jack's list... not pay any other benefits like health insurance or matching contributions to retirement plans, and not have a higher unemployment rate if they decide to fire the person I'll agree with Jack on breaking state law by not having the person listed as an employee for w/c insurance, but the company isn't saving in that area because the insurance auditor will ask for the payts to independent contractors too. And if it works like here in DE, a single person owning their own business without employees does not have to purchase w/c insurance on themselves so the company they are working for would end up with a higher premium because of this.

I'm ambidextrous, just sayin.

Yeah, and after THIS season that comment is looking for Rita's boot in response. Rita - do you outsource?

I honestly think that is seldom the true reason. The real reason, in my experience, is that many will prefer to pay a 'contractor' more just to avoid all the hassle of employment tax REPORTING. Which is also why many workers will prefer that, because they see it as making more and the paperwork on their end is just the quarterly estimates and a slightly more expensive 1040. The small business owner with just one or two workers often finds payroll their most stressful part of their business. The federal and the state paperwork is worst, to them, than just the amount of their share of the taxes.

For whom? I hope you don't mean we should help people cheat by not asking questions. Half of us can only pay the taxes for all of us for so long, you know, till something breaks. Forgive me if I misunderstood your comment, but that's all I can come up with. Unless I missed the "/s". In that case - yeah, haha.

2903/10=290. Ok, I'm good.

Well, Rita, my hairdresser is my client. You are right about the mysteries of their returns. They can have a lot of things going on at one time. They can be an employee, a SE, and an SE renting chairs in a salon. Mine, for one, is extremely needy taxwise. BUT, she does a great job on my hair and pays whatever I ask for my services because she totally doesn't "get it!"

Put together your plan as if you're consulting for one of us. Probably $10/return increase, new clients at the full prices you're aiming for, freebies asked to pay $10 each toward (pick one) license fee or pay-per-return or e-file fee or overhead or..., always show full prices on your invoices with their true discount shown, charge for initial meeting/consult/questions for potential clients with fee applied toward their tax prep fee if they become customers, etc. If you end up with software where you buy the modules separately, you may need to drop your entities. Or, your only competition for entities, including 990s, is really CPAs, so you should increase their returns $25 or something more than $10.

Just got a call from a prospective new client. The coffee is working enough that I could actually have a coherent discussion about record keeping. Had a client whose return is basically done, but two of their charitable letters didn't have the required goods & services statement so it was on hold until we get new letters (these are thousand dollar donations, so we definitely want perfected letters!). Sent email to wife and didn't hear from her (they owe), so ended up just filing the extensions without a payment. Get an email & really early phone call this morning that I didn't answer; she flew last minute to Lithuania yesterday because he mother had a fall. So I'll have to try to walk husband (who is MUCH older - in his 80's) and not the computer savvy one as to how to pay online, or grab estimate vouchers from my portal. Might be easier to just overnight paper vouchers. Thank god the coffee is working!

I am still laughing at the "actively participates" part of Pacun's post.

"I'm busy" is an excellent reply. And if you're really into economy of language, you can cut the number of words by 50%. Just respond with "no".

Those are numbers for the entire year, not just tax season. 2 of our preparers do not do office appointment and only do mailed in returns. When you factor in 9 months instead of 3, the number is not so daunting.

2903/7 = 415. I'm not that good. But wait, there is hope - do you have non-preparer staff to shoot the bull with clients, answer the phone, run copies, file, clean the toilet, vacuum (yes, vacuum, we've talked about this before)?

AMEN!

I don't offer a New Client Discount. However, I do find I under-quote to a prospective client more often than I want (working on that) so for that situation, I show the full price and use New Client Discount to bring them down to my quote. Or Referred by a Good Client or Extension Discount or whatever fits. I do offer Loyal Client Discounts to continuing clients to keep their fees from jumping too much at a time. I also offer Referral Discounts after their referral becomes a client and pays. And, Family Discounts to the dependents or even extended family if the situation warrants. Or, Extension Discount if a client extends for my benefit. In other words, I'm more likely to discount for a continuing client and more likely to charge full price to new clients. My invoices start out with the forms filed, might add time-consuming line items such as Bookkeeping, Research, Revisions, Consultation, whatever fits, and then might include a discount if that feels too high. An example might be a really well-organized Schedule C with categories totaled for me vs. the shopping bag that probably gets an added line for Bookkeeping. I have a couple of clients that after I pointed out their Bookkeeping fees got better organized and lowered their prices.

Here are a few suggestions. Pay attention to the speed. Notice such things as load speed, how quickly you can navigate within the program, how fast you can change from one client to the other through the client manager, and how easily you can swtich between the input mode and forms display. Approach it from the standpoint that "fast and nimble" is normal & expected. Don't try to make it act like ATX (in exactly the same way that you wouldn''t expect ATX to act like Drake). It is a totally different environment, which I think is a huge plus. Run backups a few times and notice how they''re done before you can blink. It will perform in exactly the same way when you begin to load the program with client data. You'll probably notice that you don't need a NASA-quality computer to run Drake; it's very resource-efficient. There are some macros embedded in the program - you should run one or two of the simple ones just to see how they work. These are a valuable feature in the program once you learn how to use them. You can automate many tasks affter spending the time to learn how macros work in Drake - they are a valuable feature. Finally, and most importantly, I'd suggest envisioning yourself with 15-25% more free time, which you can use to take on additional work (or take the time off if you wish). I've heard skeptical questions about this assertion on several occasions and other forums, but I stand by it. The only people who make this discovery are those who are willing to invest the time, change their thinking, and apply thier reasoning skills in making the best business decision.

My 1040 & Sch. A fees each go up by $5 every year, as does my per hour fee. I'm working to get the base Sch. C up to $100. That covers the cost of the software. I also started billing at full price to anyone I discount and then showing the discount in stead of just discounting off the top.

Those were the words I used not to get stressed out this tax season, last year a couple of last minute TP twisted my arm to get their return done on time, not this year baby

I went to a practice management seminar many years ago with my father, (he was an accountant, I started taxes working for him). One statement made my one of the presenters really stuck with me. "If you do professional work, charge a professional fee".

Thanks for your sage input. To be perfectly honest, you're telling me what I already know ... but it somehow sounds so much more valid coming from someone else! I have always felt a little bit guilty for thinking those kinds of thoughts! The majority of my clients are clergy (I'm also a part-time pastor)--I use that as my excuse for sub-market fees. Most of the freebies are either family or retired clergy who have little or no income. I also tend my waive my fee if the client is in the midst of a legitimate hardship. When I started doing this a hundred years ago I was pastoring full-time and my wife was working full-time--what I got from tax prep was gravy. Six years ago my wife suffered a seemingly minor head injury that suddenly turned into a major, life-threatening illness from which she has still not recovered. We lost her income (Social Security has repeatedly denied her disability with the excuse that other people who suffered her injury are able to work so she should be able also) and having to care for her rendered me unable to continue pastoring full-time. So now my consulting gig is all I have now (the small church I pastor contributes a very small amount). About 1/3 of my income goes to pay her med bills. That is what prompted me to search for something less expensive--these days I need to conserve every dollar I can. The truth is that I probably need to do a serious re-evaluation of my business model. Here's the pathetic part of all this (confession is good for the soul!)--part of what I do is business and personal financial counseling. I regularly counsel people like me. And they end up doing very well. If I were counseling someone like me I would be telling me to do things very differently than what I've been doing. You're right. I'm a goofus! Sounds like I have some work to do.

Yes, it did take forever, and you're welcome. I was hoping to be helpful as well as self-deprecating. It makes me feel better about the whole boot incident.

I'm finally finished! 102 extensions. I can't believe how many people showed up today. I even got a 2013 in that I thought I had lost. Tomorrow my first excursion away from the house since Easter is to take my son to have his wisdom teeth taken out since he ended up in the ER last week in KS with severe pain and a very bad infection. I don't know why these things can't happen when he's in town. Fortunately, he didn't fly down there or we would have had to drive a pilot down there to fly the plane back that lets him borrow it. Then I can finally get my haircut after I get him home so my husband can watch him. We were going to a movie, but that's out for now. Thanks to everyone on this board. Now I have to get back to quarterlies, sales tax and property tax returns.

Yes. Does he use his own truck? Of course, he could probably argue successfully that he's an employee, but he also would probably find himself out of a job.

This post coattails on JJStephens post entitled “Tis the Season (aka Here We Go Again). Is anyone willing to provide their approximate fee schedule? Are your fees based solely on forms used or is it based on time spent? I have a day job and prepare returns at night and on weekends for approximately 100 clients. My base fee is anywhere between $125 and $150 (depending on how I feel that day and if I like the client ) for Federal 1040 and one State. That fee covers W2, normal interest and dividends and Schedule A (I guess you could call it a more basic return). If I start adding forms my price will increase accordingly but I do not have a set fee per form. It depends on how much time I spend on it. Prepping a Schedule C may add $25 or significantly more depending on the amount of work that's involved. Stock sales would also increase the fee. If there are only a few sales it would probably stay right inside that $125 to $150 range and not add any additional charges. If there are more sales, my price would go up. I also offer a new client discount. So my invoice states the price of my service: Preparation of Federal and New Jersey Personal Income Tax Return $ 150 New Client Discount $ -25 Total $ 125 In my initial meeting, phone conversation or email exchange (there are many clients I have not met face to face who have been with me for many years) I indicate that my price is dictated by the amount of time and work involved in preparing their return. After looking at the information they provide (including a copy of the prior year return), I give them a general idea on what it should cost. I do not indicate there will be a “New Client Discount”. I think they are pleased to see a small credit on their invoice and it may result in some goodwill and also prepares them for what the fee may be next season. I believe that the majority of my clients value my services greatly. Those who leave due to a price issue are not those who want to establish a long-term relationship. And that's their right but I don't lose sleep over those clients. Ultimately, as a preparer we have to recognize the significant amount of knowledge and value we bring to the table and our returns should be priced accordingly.

So, it was the podiatrist for me. He had two stories. Last year, someone filed with his SSN. Did the whole routine and e-filed this year with his PIN and all was well. Secondly, daughter began work for a consultancy that sent her all over the country, so dad sent her and all her W-2s to his CPA. CPA called all upset that the NY W-2 had her full income on the NY line. I chimed in that NY requires that. He said that that's what his daughter and CPA learned from calling NY. And, he was pretty impressed that I knew that. Go EAs! But, it's really because I have a lot of commuters and get a lot of my education from the NY/CT-ATP.

I have no idea if this is some new scam -- but at least you could check the address to send to and see if it is a known NJ taxation dept address. If it is, it's far more likely to be legit. But I would recommend to any of my clients to hold off sending unless/until they can confirm with the state. My two cents' worth, ymmv.

I did not like the implication that "only" a PhD holder can be smart (and that if you can put one over on them you're extremely clever in your disguise). However, it is also VERY clear from the article that the leasing company is telling people "this is NOT a lien" when, in fact, it IS considered a lien by banks etc. THAT is deception if not fraud. I don't care *what* people do in terms of getting solar panels: buy, lease, take up a collection, refrain, whatever. As long as they have all the pertinent information to make that decision. Being told "not a lien" when all outside agencies with whom one must deal say "yes, a lien" is deception.

It is almost always better, financially to buy rather than lease, the panels.

But no, she does NOT have to add 'imputed income" from her bf, but as stated, it should be Sch C, not E because of the time factor. As to the depreciation, use the sq foot rule to see if the ONE rented room depreciation was calculated correctly or not. And depending on the time factor on the rentals, you may need to file amendments because of the wrong schedule used in the past.

23 Extensions here; as well as 474 acks; counting all Fed and several different states. Not a terribly lot of ACA; but most of them problematical.

My fee starts at $85 for a 1040/540 e-filed. Every form I add increases the price. That includes every W2, Every 1099, every Schedule, every stock trade, and Every K-1. I show my clients my price list with all the forms entered. My average fee is about $142. We did about 150 returns last year. That is down from about 200 before we had to move from Lodi. I feel like each client should be treated the same. So if they have a rental, then there is a charge for that form. How efficient I am that day with my entry should not matter. You pay the same for your rental as the next guy. Then only place I screw around with that charge is a Schedule C. If I have to basically do the books for them before I can prepare the form, I will add some more to my fee. If it is a very simple business and the books are in order and I have a few line items to put in, I will discount it. I price my services as a value preparer, because I have a day job that pays the bills and I am looking for this business to be my retirement occupation in 10 years more or less. I would like to get to 300 clients by that time and then I will start moving my price structure up quite a bit. I will not be positioning my practice in the "value" category at that time, but positioning it as a full service, year round preparation and representation firm and I will price accordingly. I will also be positioning it for a sale when I move to full retirement. But that is a long way off. Tom Newark, CA

Interesting. I'm probably a bit too much of a people person for my own good. That's a good trait when I have my pastor hat on; not so good when I have my biz pro hat on. As for Drake--I've reached a point that it is the only thing I am willing to consider in lieu of ATX. During my one year off from ATX I used a product that was somewhat similar to Drake. It took a bit of learning but I got the hang of it. I've demo'd Drake half a dozen times during my 28 years as a preparer. What I've discerned is that those who love it really love it and those who don't really don't. Over the next couple weeks I'll find out which I am from the demo I ordered. Anyway, I'm excited to launch my 'reinventing the way I do business' project over the coming days and weeks. Thanks again for all the great input.

Jack...with 485 extensions, how many returns were filed by the 15th at your firm?

At the firm, 485 extensions. In my personal practice, 17 extensions.

I need some of this to put on my garden!! It will last until the 2nd audit that goes bad...

I did that last night; close to 7pm, I had a client uploading a 1099-R & reports from Square for her Sch C biz. Assistant put in the 1099-R and I emailed her back what she owed based on just that & links to direct pay & web pay. Answered the next email with- I'm done. Just pay something, especially to Ca so you have a valid extension there. The federal extension was already filed in my 'heard from you but didn't get any stuff' yet batch.

JJS, I too am guilty of undercharging on some, mostly because I have very long-term clients and it is a mistake to not raise prices each year to keep up with what the competition is doing or allow the fixed expenses to become a larger share of the revenues coming in. I didn't raise my prices the year the economy fell apart, and so each year I have that shortfall as I raise by a percentage of the prior year, where if I hadn't skipped that year's increase each year after that would have been higher. I raised prices by 10% over last year, and I may do that same again this year. We can only shave so much off the expenses instead of raising revenues. I've shaved everything considerably. I know that I could take on more work, and I've started asking clients for referrals. I never take price shoppers and almost never accept people that call from the phone book. If you have some balkers at your price increases, you could offer them an after-the-fact discount if they refer new business. It could be small, like $10, but it will help your practice grow and will help to replace any that leave over your raising prices. I doubt you'll have many leave though.

That's why the deductions are limited to only the sq ft of the one room being rented, and further limited to not allow any loss, all because the owner is also living in the property.

Sounds Great. Don't you just love it. Us "cowboy tax professionals" need to be hog-tied. No doubt about it.

I remember last year (I think November) while we were enjoying our wine or soft drinks, this site was down for a short period of time and Eric was working hard to bring it up. I said to myself, if anyone deserves a token of appreciation is Eric. Of course November and December are semi dead for us (income wise) so I said to myself that I was going to donate something during tax session and I did. I hope everybody donates even if only a couple of thousands each. I am just kidding. Every penny counts.