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'Tis the Season (aka Here We Go Again)


JJStephens

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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.   

KC-- we had an attorney a while back but the guy--a supposed specialist--gave up after the first rejection. We didn't press it because just about that time the docs finally found a med regimen that seemed to be working and we hoped she would be able to return to work. Turned out to be just a temporary lull. She started to pursue the claim again but was told by SS that she had missed the filing deadline. About a month ago she started working with a new attorney who does nothing but SS claims. He is virtually certain he can get her approved ... eventually. He says it will likely take 1-2 years and that if/when approved she would get benefits backdated to two years prior to her application. So, we're hoping for a 'someday' mini-windfall. Till then ...

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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.

Hey Rita, we chatted about this in another thread a week or two ago. In my case, the problem is not that they expect a break. It is that I give it to them. In all the years (28 or 29) I've done taxes I've had only one pastor ask for a break solely because of his clergy status. Of course, most of them came to me because of word of mouth and knew I already had ridiculously low rates. However, I think/hope most came not just to get a price break but because they were looking for someone who specialized in the unique nature of clergy tax prep.

 

Like you, I've seen some misguided counsel given. I makes me as sick as it makes you. But frankly, those have been the exceptions rather than the rule. I can also tell you times that my colleagues (and I, on at least two occasions) have talked suicidal people into giving life a chance. Or the times they have put in ridiculous hours to try (often successfully) to salvage a marriage that the players seemed ready to throw away, or commiserated with parents over a wayward teen, or a spent hours at a hospital bedside or garsh, I could go on ad nauseum, but you get the picture. Sure there are charlatans out there; but aren't there just a few scurrilous tax preparers who give us all a bad name? No true professional wants to be judged on the sins of a disreputable few. I do respect your position and your frustration over a few bad actors. I just hope you'll give the honorable majority the benefit of the doubt. Anyway, that's my two cents worth.

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On the speed issue--I've had my current machine (decent dual core processor with 8gb of RAM) for 2 1/2 years. It seems to run ATX just fine. However, I have noticed that it now takes about 50% longer per return than five years ago. I know the code has gotten more complex and the IRS increasingly uses tax preparers as enforcement agents but some of it is just increased complexity in the ATX process (things that used to be direct entries now required opening a separate screen to make several entries) and in the ATX code--rollovers take longer, opening a return takes longer, saving takes longer--all things that point to bloat. I'm grateful things are better than '12 but

 

Oh for the good old days when I was cranking 'em out with Parson's tax package. $79 and flawless execution! By the way, in case you're curious, after selling off the pieces of Parson's Technology Bob Parsons started another little computer outfit. It's called GoDaddy.

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I would never charge Less than the big box stores, I have confidence in my ability and I believe my clients do too, they are paying for year round access, etc etc.

 

I probably should raise my fees every year but I have the habit of raising 10% or so every 3 years. On the rare occasion a client questions it, I can honestly say, hey its been the same for over 3 years, have your utilities and grocery bills gone up, So have mine.

 

In JJ case, if he raised 300 returns $10 that's $3000 if he loses one or two, he is still way ahead and working less. 

 

I also don't have any rules written in stone, the little old lady that I have been doing for 20 years may not see an increase for  10 years, etc.

 

I bill on value, not fee charts or form based nor income based.  A w-2 for $600,000 is the same fee as a w-2 return for $40,000.  There is no added value because they made more until the richer client starts adding investments etc.

 

Oh and the PTP's that Merrill Lynch pushes so much, I add 50-100 for each one. 

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I would never charge Less than the big box stores, I have confidence in my ability and I believe my clients do too, they are paying for year round access, etc etc.

 

I probably should raise my fees every year but I have the habit of raising 10% or so every 3 years. On the rare occasion a client questions it, I can honestly say, hey its been the same for over 3 years, have your utilities and grocery bills gone up, So have mine.

 

In JJ case, if he raised 300 returns $10 that's $3000 if he loses one or two, he is still way ahead and working less. 

 

I also don't have any rules written in stone, the little old lady that I have been doing for 20 years may not see an increase for  10 years, etc.

 

I bill on value, not fee charts or form based nor income based.  A w-2 for $600,000 is the same fee as a w-2 return for $40,000.  There is no added value because they made more until the richer client starts adding investments etc.

 

Oh and the PTP's that Merrill Lynch pushes so much, I add 50-100 for each one. 

 

Have you ever considered penalty risk in your pricing?  A penalty on a return with a $600,000 W-2 would likely be much greater than a penalty on a return with a $40,000 W-2.  None of us expect penalties to happen, and we certainly don't expect them to be our fault if they do, but we still need to allow for the possibility.  Now if your fee schedule already has this risk built into it based on the $600K W-2, then you're doing just fine on the $40K return.

Edited by JohnH
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The speed issue is a factor if you have a high volume practice and/or prepare returns in front of the client. I don't have either of these, so I've found things to do, like review the client documents, prior year file while waiting to get the return or program or whatever to open.

Now 2012 was another story altogether!

I view this more as "work expanding to fill the time allotted".

I don't see it as any sort of measure of efficiency, and it certainly isn't having any positive effect on your bottom line.

But I also understand that there are non-financial aspects to any business practice, and we each need to be comfortable with how we operate.

Edited by JohnH
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I was "way underpricing" about 30% of my clients several years ago and realized that I was literally working myself to death and not making any money.  I sent a letter to those 30% after the filing season telling them that their fee the next year would at least double.  They could pay the fee and continue our relationship or they could find another preparer that could satisfy their need at the lower rate - either way they would not hurt my feelings.  About a third stayed and remain good clients and the others chose to leave.  So I worked less hard for nearly the same amount of money.  From that point, I purposed to get my complete fee structure to a respectable point.  So I systematically increased my minimum fee over a period of about 8 years to where it is today.  And every year, I raise every tax client (well, not every every client), a minimum of the cost of living increase but more likely 2 to 5% more than that.  And I never apologize for my fees.

 

As some of the others have said, stay with the software you have comfort with and bump up your fees to pay for it.

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I've been off the board for several days--still dealing with the second of two kidney stones that slammed me back in early April (great timing!).

 

I've been working on a new pricing model for both my tax and accounting work. It nets out to about a 25% increase on tax work and 20% on accounting work. I'm giving existing clients a 10% discount the first year to ease the pain a bit. I'm also going to scale way back on the freebies (I'll ask then to at least contribute enough to cover my overhead).

 

Comparing it to the responses to Yardley CPA's Fee Schedule posting (great idea, by the way. I had the same idea a couple days ago but having been hurting too bad with the stones to post it. Was really happy to see that someone beat me to it). Anyway, based on those responses it appears my new fee structure will be much closer to what many of you are charging. I'll still be just a bit under the big boxes but I can live with that. As I project it out (even allowing for a 5% lapse rate) I feel pretty good about where I'll land over the next year or two.

 

Thanks again for all the great counsel and for giving me the kick in the seat that I needed to make this happen.

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JJ - as KC noted before, don't give up on the disability issue.   My wife and I went through that on her behalf several years ago - and managed without an attorney.   It took nearly 30 months from start to finish.   The path here is designed to get you to give up.   Rejection is the government's way of driving you to give up.   Don't do it.   And a final thought - if you can get your wife's doctor on board to write a very thorough letter describing her condition and its prognosis you are a step up.   Then ask the doctor to attend the ultimate hearing you will have before an administrative judge and you may find it is easier to win than you thought.   And the bonus on top of the retroactive dollars is you can get her on Medicare immediately if you are more than 2 years past the date designated as the start of her disability.

 

God works in very strange ways as we can attest to.   Will pray that He can lead you through this and allow you and your wife to reach a better solution.     God Bless !

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  • 2 weeks later...

Hey Doug--thanks for the encouragement. After the first denial we resubmitted with THREE doctors certifying she was disabled. They summarily rejected it again. That occurred as we were in the midst of moving (a massive ordeal, given her condition). After we got settled in we called and they admitted that they did not even consider the doctors' affadavits. And they informed us that we had exhausted our appeals and the deadline for filing had passed. We gave up. A couple months ago we discovered that was not true so we engaged a new attorney and began the process again.

Update on the pricing issue. I sent out a price increase notice to all my accounting clients and got one response--essentially 'we're delighted with your service and happy to pay the higher fee.' The rest apparently just yawned and went back to sleep.The bottom line--no fall out whatsoever (he says with a goofy little grin plastered all over his face). I plan to send a newsletter to all my tax clients in the next month or so alerting them to the new schema. I hope I get the same results!

 

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