Comment As You See Fit - Price Increase

[MsTabbyKats]

As we all want to be compensated for our work....I am going to have "across the board" price increases this year.

If anyone objects...this is the blurb I'll e-mail (or read if it's an "in person" situation).

Please comment....if you think it's harsh, too soft...or OK....and please comment on the grammar.

My goal is to have less work....and make the same money. I don't care if the people who make $250,000/year rebel and drop me because I want to raise them to $200.

Just as no two people are exactly alike, including identical twins, no two tax returns are the same.

My fee is based on a combination of data to input that I am given by you, forms that will be generated and time needed to prepare your tax return.

This year the IRS has imposed new regulations, and in order to avoid “potential issues” I will be spending more time doing “due diligence” on every return.

[Guest Taxed]

I personally don't like to do across the board price increases because I have a lot of senior citizens with very limited income as clients and their returns are really a breeze. I have in the past targeted my increase for those taxpayers whose returns consume the most time and effort such as long Sch D, multiple rental units etc. This year I am going up on EITC returns.

Your practice is different that mine so what works for me may not be applicable to you. After reviewing the latest survey, I am on the low side but I am practicing in a depressed area with high unemployment.

[MsTabbyKats]

I 'm not asking about "if" I should increase...but if this "blurb" is ok.

I want to be direct and to the point....if someone complains. I have many clients who can afford more....but got referred to me because of my cheap price.

[Guest Taxed]

I think it look ok.to me. My engagement letter has something similar about how the fees are based (time and effort).

[michaelmars]

As we all want to be compensated for our work....I am going to have "across the board" price increases this year.

If anyone objects...this is the blurb I'll e-mail (or read if it's an "in person" situation).

Please comment....if you think it's harsh, too soft...or OK....and please comment on the grammar.

My goal is to have less work....and make the same money. I don't care if the people who make $250,000/year rebel and drop me because I want to raise them to $200.

Just as no two people are exactly alike, including identical twins, no two tax returns are the same.

My fee is based on a combination of data to input that I am given by you, forms that will be generated and time needed to prepare your tax return.

This year the IRS has imposed new regulations, and in order to avoid “potential issues” I will be spending more time doing “due diligence” on every return.

don't like that you are only referencing "data input" since that's what turbo does, you should be referencing mostly "your review of all the relevant data, your experience and your extra time needed due to complex changes this year." on a minor note you can say "the volume of transactions also has an effect on time spent on your return." I find I can input a return in less than 15 minutes but its the thinking about it and the possible money saving idea's that create my fees.

[MsTabbyKats]

New version:

Just as no two people are exactly alike, including identical twins, no two tax returns are the same.

My fee is based on a combination of the information that you provide, forms that will be generated and time needed to prepare your tax return.

This year the IRS has imposed many changes, and in order to avoid “potential issues” I will be spending more time doing research and “due diligence” on every return.

Please be advised that the income has no relevance in my fee. The volume of transactions and time spent determine the cost.

[Lion EA]

Agree completely with Michael. And, something along the line of time and knowledge (education?) needed to prepare a complete and accurate tax return for you. Or, something about lowest legal tax liability. Stress your time AND EXPERTISE devoted to them.

[easytax]

My suggestions:

Yes, I got carried away (again) but this may give you some ideas ...

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This year (as in other years) the IRS has imposed new and additional regulations. In order to avoid “potential issues” I will be spending more time doing “due diligence” on every return. This of course is completed along with reviewing all your relevant data to see where we might lesson your tax bill.

My fee is based on a combination of my knowledge, ongoing training and review of the various tax laws and regulations, obtaining data from you along with assisting you in knowing what data could be required with your unique and particular circumstances. The knowledge and assistance parts are in addition to the cost of software(almost always increasing unfortunately, just like everything else)so we can fulfill the IRS's requirements on submissions, etc. All the afore mentioned items don't even include the actual tax form preparation time after reviewing your data and finding if there might be legal ways to reduce your federal income tax burden.

As you know, from your activities and profession, they require thinking and planning, the actual "doing" is never easy and "getting ready" for the "doing" can be even harder and take more time than the actual "doing".

Just as no two people are exactly alike, including identical twins, no two tax returns are the same. It's one of the blessings and curses of being unique and having to meet requirements of the government.

As always, so I can continue to be here to assist you with your need and requirements, my fees are set fairly and accordingly. Like you, I'm in it for the "long haul" and I do want to be here for you, now and in the future too.

[Mr. Pencil]

Just as no two people are exactly alike, including identical twins, no two tax returns are the same.

My fee is based on a combination of data to input that I am given by you, forms that will be generated and time needed to prepare your tax return.

This year the IRS has imposed new regulations, and in order to avoid “potential issues” I will be spending more time doing “due diligence” on every return.

Personally I don't think it is very convincing. First of all, I never like passive voice. "You give me" would be better syntax than "I am given by you." But at least that sentence is informative.

The last one sounds like you are trying to protect yourself. Well, of course that's true, but it doesn't make for the best public relations. Why not say that IRS has published new guidelines to ensure the client's return will be accurate and defensible? Tell your clients that they will get more for the money.

[Guest Taxed]

MsTabbykats if I remember correctly from your previous posts you do not do face to face tax preparation, so in your situation if you let them know of a fee increase before they mail in their paperwork may actually help you filter out the clients who will nickle and dime you? Most of my clients are face to face so I have to hear them "complaining" when I present the invoice!

[MsTabbyKats]

MsTabbykats if I remember correctly from your previous posts you do not do face to face tax preparation, so in your situation if you let them know of a fee increase before they mail in their paperwork may actually help you filter out the clients who will nickle and dime you? Most of my clients are face to face so I have to hear them "complaining" when I present the invoice!

You're right....almost 0 face to face...so I don't get to see "the cringe".

My plan is to tell them the price before I start work (after they send me their stuff)....and if they complain....send them my blurb.

For the ones that "call to complain"....I'll but the blurb in an e-mail.

For the few technically challenged ones that I have.....I'll tell them by phone....before they come over.

I'm revising....taking all the comments into consideration....and will post whatever I come up with.

Personally....I really don't care if some drop me. Those are usually PITAs anyway ("Why was my refund $8 less this year than last year?" types. You all know what I mean.)

[JohnH]

Personally, I still like this.

It's in my client letter:

"Fees & charges for basic tax preparation will again increase an average of 6% - 8% this year. Also, some schedules involving more complex tax matters may incur additional charges exceeding the general increase. The type of items most affected are returns reporting rental income, returns reporting multiple transactions involving the sale of stocks or mutual fund investments as noted in the previous paragraph, and returns reporting income from self-employment. I encourage you to ask for an estimate if you have any concerns about what it will cost to complete your return."

Then say nothing about the fee increase unless they ask.

I find that very few ask.

============================================

There's a principle in sales which applies to many other situations in life - "any time you're explaining, you're backing up." By signaling that you feel a need to explain in advance, you're inviting people to question you. You're turning control of the conversation over to them before they even show any interest in pursuing the matter. It's much better to assume that reasonable people will understand that you need to increase your fees from time-to-time. For those who don't, you need to decide whether they're worth taking the time to explain yourself to them. In some cases, your answer might just be - "that's what I'm charging now for your type of return."

[MAMalody]

<<< I will be spending more time doing “due diligence” on every return. >>>

To me this implies you were either not doing any before or not enough and have made some errors.

[michaelmars]

how about being honest "my fees will be based on however high I think I can charge you before you revolt, minor protesting Is expected and will be considered banter and not taken as a serious revolt"

[JohnH]

I like Mike and Michael's answers.

Also, you will be pleasantly surprised to hear some clients say "I wondered when you were going to go up. My brother-in-law pays his tax preparer twice what you charge me, and I know for a fact his return's a whole lot simpler than mine."

[Crank]

This year the IRS has imposed new regulations, and in order to avoid “potential issues” I will be spending more time doing “due diligence” on every return.

I believe this statement will lead to questions regarding which new regulations have impacted their specific tax return.

[mcb39]

I believe this statement will lead to questions regarding which new regulations have impacted their specific tax return.

I believe that it also leads to speculation as to why you haven't been doing "due diligence" all along.

[MsTabbyKats]

Just as no two people are exactly alike, including identical twins, no two tax returns are the same.

My fee is based on a combination of the information I get from you, forms that will be generated and time needed to prepare your tax return.

Please be advised that the income has no relevance in my fee. The volume of transactions and time spent determine the cost.

Despite the increase, my fees are still below “the competition”. I invite you to compare my fee with any other tax preparation service.

OK....please comment!

Thanks for the input............

[JohnH]

Despite the increase, my fees are still below “the competition”. I invite you to compare my fee with any other tax preparation service.

Here's what I thing your'e communicating, without meaning to:

I work cheap. Check around and you'll see that's true.

Here's how some clients might interpret that

"I wonder what short cuts she's taking. ? ? ?"

1) I don't think you gain anything by calling people's attention to price.

2) Being the lowest-priced person around really isn't anything to brag about.

3) If you encourage them to look around, they will probably find SOMEONE who will work cheaper than you. And once they've done that, they make take your advice and switch based on price.

[MsTabbyKats]

Despite the increase, my fees are still below “the competition”. I invite you to compare my fee with any other tax preparation service.

Here's what I thing your'e communicating, without meaning to:

I work cheap. Check around and you'll see that's true.

Here's how some clients might interpret that

"I wonder what short cuts she's taking. ? ? ?"

1) I don't think you gain anything by calling people's attention to price.

2) Being the lowest-priced person around really isn't anything to brag about.

3) If you encourage them to look around, they will probably find SOMEONE who will work cheaper than you. And once they've done that, they make take your advice and switch based on price.

I understand what you are saying....but....most of my clientele came to me because "of price".

While you may feel it's nothing to brag about....they think it is.

(They are aware that I work out of my apt and have no overhead.)

With new clients....I'm just going to give them "the going rate" price....and if they complain (but Joe said you only charge $XXX) my response is very simple "My rates went up.")

If they switch based on price....that's fine with me.

[Mr. Pencil]

.most of my clientele came to me because "of price".... They are aware that I work out of my apt and have no overhead.

I take back what I wrote this morning. I think you need to very directly address the issue of protecting yourself.

[MsTabbyKats]

I take back what I wrote this morning. I think you need to very directly address the issue of protecting yourself.

"Protecting myself" because I work out of my home?

Please explain why?

[Mr. Pencil]

"Protecting myself" because I work out of my home?

No, at least not directly. You have apparently built your practice with clients who care mostly about money, rather than the quality of your work. Since they don't understand or care how you get the job done, they will blame you for everything. Some day one will blame you big time, and that's when the home office will be a problem. It is hard to present a shoe-string operation as a professional engagement with reasonable quality control such as peer review.

Read SaraEA's response in the thread Taxpayer Accuracy Penalties as a Result of Audit. See what she says is "the only purpose" for some of her work? I fear your clients are not likely to be motivated that way.

[kcjenkins]

(They are aware that I work out of my apt and have no overhead.)

WRONG Your overhead includes your software, your hardware, your CPE, your internet, paper, toner etc.

I'd rework that last sentence to something like:

As always, I will be keeping my fees reasonable, although they will be rising to reflect my increased costs for software, CPE, etc.

Do not be more specific, you do not need to apologize. And don't mention other preparers, either

[MsTabbyKats]

No, at least not directly. You have apparently built your practice with clients who care mostly about money, rather than the quality of your work. Since they don't understand or care how you get the job done, they will blame you for everything. Some day one will blame you big time, and that's when the home office will be a problem. It is hard to present a shoe-string operation as a professional engagement with reasonable quality control such as peer review.

Read SaraEA's response in the thread Taxpayer Accuracy Penalties as a Result of Audit. See what she says is "the only purpose" for some of her work? I fear your clients are not likely to be motivated that way.

LOL Mr Pencil

You know nothing about me or my clients....or their backgrounds.

I've been doing this 20 years and had very few "issues". But each one was resolved in the client's favor. I don't accept any clients with potential problems. They get referred to "others."

I started doing this as a hobby......I just got much more popular than I anticipated.

My goal is to not complicate life......make a little money......and help out people who want good work but are short on their means.

This is why I'm raising all my $250,000 IT engineers a lot......and not caring if they leave so I can focus on my $30,000 researchers with 2 kids, who have trouble with day to day expenses. Maybe they get a $10 increase.

There is very little potential for audits where the client owes an additional $10,000 in my target category.

But I do appreciate your comments.