Latest Nationwide Average Tax Return Fees

[FDNY]

According to Tax Pro Today.  What puzzles me in the article is non-credentialed individuals charge more than AFSPs.  Unless they're doctors or MBAs working on the side to pay off student loans, it doesn't seem right to me.

http://www.accountingtoday.com/news/tax-practice/average-tax-return-costs-114-to-prepare-79776-1.html?utm_campaign=tax pro today-nov 7 2016&utm_medium=email&utm_source=newsletter&taxpro=1&ET=webcpa:e8056594:2534650a:&st=email&eid=818634505c7b34839d109e7e6769651a

[Abby Normal]

There must be some real boondocks places dragging those average prices down.

[Lion EA]

Maybe many of the non-credentialed surveyed are experienced tax preparers not bothering with testing if their practice is as full as they desire.  I know many that are at the stage in their careers where they are purposely shrinking their practice or selling or actively considering selling, sometimes just a portion, such as biz returns or payroll clients.  Those that never got an EA are not inclined to take the time to test now.  But, after years of experience, they might be charging higher prices than a newbie AFSP.  Just my theory.

[Jack from Ohio]

There are many preparers that do returns as a second source of income that charge low fees just to keep clients.  This practice of providing "affordable tax preparation" with pricing based on the clients financial situation, degrades the value of professional tax preparation by those of us doing it as a living.  

I hear the words: "Well they can only afford..." when talking about pricing very often among my peers in this industry.  That attitude directly undermines my ability to charge a reasonable professional rate for my services.  

Please show me where it is stated that obtaining services from a professional must be "affordable?"  My auto technician, plumber, electrician and landscape provider have no such policy.  

I have seen "part time" preparers charge 1/3 of what a return is worth because" "It is just something I do to earn a little extra spending money."

RANT OVER

[GeneInAlabama]

I know what it is like to wonder where the next dollar is coming from.  I think those of us who have been in that position have more concern for those who are going through that.

[Yardley CPA]

Over the years, I've increased my minimum for new clients to $150 ( and I'm sure this may be low for some ) for the most basic federal and one state.  Some of my longer tenured clients may receive more favorable rates.  Most of my clients don't bat an eye at the price.  They recognize I am very reasonable and provide them with top rate service.  Those who have left due to what they perceive to be a high price, have been replaced with two or three new clients.  I look to establish a long term relationship with those I partner with.  I provide prep and planning, mainly looking at what the future holds and how it may effect their returns in years to come.  I do not prepare returns full-time, but after my full-time day job.  That doesn't influence my pricing.  I believe my experience and credentials provide ample justification for what I charge.  If clients feel differently they can pursue other options.   

[SaraEA]

We don't take many new clients, some referrals from current clients who have a friend or relative whose former tax pro retired.  Often I am shocked at how little they had paid and warn them before I even enter their basic info that they will pay a lot more than they used to.  They react like they were expecting it, and not one has ever complained about my bill. There must be some preparers out there who don't raise their prices very often, and their clients stick with them for 20+ years paying little more than they did two decades ago.

That's impossible in a modern tax office.  Starting maybe three years ago we have raised our prices almost every year.  The big culprit is software costs, which we all know go up at the rates of college tuition.  There are also increasing costs of compliance and risk.  When the due diligence rules came out for EITC, we raised the price on all those returns $25 (I know, for folks who can least afford it), even though we do very few EITC returns and know all of our clients.  We'll have to determine if we'll do the same for Additional Child Tax Credit  and education credit clients this year, now that due diligence will apply to them as well.  Whereas we used to take info verbatim from our clients because we know them, now we have to fill out another cumbersome form and face penalties if we don't cross all the t's and dot the i's.  Oh, and did I mention the costs of E&O and now computer intrusion insurance?

Many of the old timers still did returns by hand (law against that now) and didn't fuss with insurance and potential penalties.  A couple of years ago I had a lady come in with three multi-unit rental properties who had paid $100 for tax prep. The hand-done depreciation schedules were accurate to the penny! 

[BulldogTom]

Just yesterday we were discussing the amount that we would raise prices this year.  I have to....I need to keep up with the costs.  I will lose a few I am sure. 

I charge by the form, so I need to do a thorough review of all my fees.  Not looking forward to it.

Tom
Newark, CA

[Catherine]

10 hours ago, BulldogTom said:

I charge by the form, so I need to do a thorough review of all my fees.  Not looking forward to it.

Ditto, likewise, and me neither!

[Catherine]

12 hours ago, SaraEA said:

The hand-done depreciation schedules were accurate to the penny! 

Elderly couple (both gone now, bless them - they were darlings) came to me years ago due to an IRS letter (agency was wrong; he was right).  His hand-done (no calculator; paper and pencil and brain ONLY) estimated payments for the year were off, for the entire year, by $16.

[FDNY]

When I think of the old days doing returns manually and charging such low prices I think the clients were really getting a bargain.  But then again a slice of pizza was only a quarter at Salerno's.  But today maybe you make exceptions for the little old ladies who love you, the low income clients, like postal retirees with very little, if any SS, or a HOH with a disabled adult child just making it by.  These are some of my clients that have been paying un adjusted pricing for years.  You get it back, the little old lady that says I love you and sends homemade cookies, the postal worker who always adds $10 to my bill, and the single parent who says she wishes she had a son like me.  For all that, I'm happy what I charge them.  But all the others, they pay full freight and like it or lump it, it is what it is, they mostly all stay because they realize the value in your work.

[Lee B]

This article on Tax Pro Today is like throwing stuff on the wall. It doesn't tell you much.

[BLACK BART]

On ‎11‎/‎7‎/‎2016 at 10:15 AM, Abby Normal said:

There must be some real boondocks places dragging those average prices down.

Hey! Take that back!  (Resident of Boonsborough here).

I don't think there is a cure for 1/3-charging card table operators - they're everywhere (even here; one takes all comers-35 bucks). Jack's got a good point about (non) affordable electricians/plumbers' "take it or leave it" policy; but unfortunately there isn't a TurboTax alternative for wiring or commodes. I have to charge what I/they can/will stand for without running them off.  AR income and my fee (probably AL Gene's too) will likely be substantially less that his OH price, but on the other hand I imagine Lion's CT practice serving the upper-end carriage trade out of NY would likely shade us all. However, allowing for locale, the question remains; are we charging enough?

There are so many varied sorts of returns and a patchwork-quilt of customer types that it's hard to generalize unless you're willing to draw a line in the sand, say it's X$, and that's that-no matter what. Every three years I sort of do that (with exceptions, if I know what's good for me) and raise prices $20-$30 across the board. But each time I invariably lose almost 25-40 customers (some simply won't go along - surprised at pickup, they don't come back). Downside-customer base shrinks; upside-less work and price offsets the loss. Other preparers tell me large all-at-once hits aren't smart; that it's better going up 5% a year, but that's nickel and diming to me and I don't like it. I occasionally lure  and lowball newbies, gradually bringing them up to snuff - most don't like to change once they're with you.  Between raises I baby the clients around quite a bit with servile service to justify my mercantile streak (probably should've taken up social work instead of this biz). 

P.S. to FD/Gene: I also have a "widows and orphans" rate.

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He is a self-made man, and worships his creator. - John Bright: Disraeli