Rate Increases?

[ETax847]

With costs for materials at an all time high, by what percentage will you be increasing your tax prep fees?

[Lion EA]

I'm thinking 10% across the board. I may send out an email in December saying a 10% increase over 2021 return PLUS an additional cost for any new forms. I might go higher, in hopes of a few leaving me.

[Gail in Virginia]

I am thinking 15%.  I did not raise prices for several years so I feel like I am behind.  Besides, I really want to work less hard. 

[Margaret CPA in OH]

After reading this, I did decide to up by $10, I charge by time.  It has been 2 years since my last increase but I do charge extra for any tax credit work, i.e. Form 8867.  The increase is small but my costs have hardly increased.  The slight bit for the software but Verifyle is still the same as is my insurance.  I make enough and work as much as I wish.  It's been wonderful since relinquishing bookkeeping, payroll, and virtually all small businesses - just a couple of small SMLLC's and a couple with rentals.  I'm okay and I know some of my clients don't have a lot extra.

Gail, do work less.  Your time and mental and physical health are so much more important.  Charge more, work less with the remaining better clients.  It seems to work with lots of folks.

[mcb39]

I can't quote an across the board increase because it depends on the individual return and what the client has added or removed.  I charge by the client and the work entailed.  I take into consideration the circumstances of the client as well.  Everyone will throw their hands in the air and say "Poor, silly girl should know better", but that doesn't change my way of thinking.  If I have  learned anything in my 80 years; it is that what goes around, truly does come around.  I have never considered this business to be all about money.   Not to say that money isn't great.  It is!  And sharing it is even more wonderful as long as you don't go without something yourself.  I will raise some; keep some the same and charge most new clients more than I normally would.  Each set of circumstances is different in this office.

[Margaret CPA in OH]

Marilyn, we are so alike.  I nominally say I charge by the hour/time involved in my client cover letter but I am the timekeeper.  Sometimes all the time isn't recorded/remembered or charged.  I am aware of the situations of most of my clients and am sensitive to those struggling.  Although my engagement letter states payment must be received before returns are transmitted, I have held to that once.  And I always remind folks that I know where they live .  In over 25 years I have been outright cheated once.  I'm okay with that.

And the vast majority of my clients are really friends, too.  I recall one who broke down in tears the first time she came to me as her prior preparer 'fired' her and she was bereft.  We worked it all out and she never cried again.  And, at 76, I still work because I really do enjoy the work and the money pays for my exotic dive trips and my husband cannot say a word .

[Slippery Pencil]

Trader Joe's 1lb bag of frozen Brussels sprouts were $1 a year ago.  Today they were $1.50.  So I'm guessing a 50% increase would be fair.

[mcb39]

14 hours ago, Margaret CPA in OH said:

Marilyn, we are so alike.  I nominally say I charge by the hour/time involved in my client cover letter but I am the timekeeper.  Sometimes all the time isn't recorded/remembered or charged.  I am aware of the situations of most of my clients and am sensitive to those struggling.  Although my engagement letter states payment must be received before returns are transmitted, I have held to that once.  And I always remind folks that I know where they live .  In over 25 years I have been outright cheated once.  I'm okay with that.

And the vast majority of my clients are really friends, too.  I recall one who broke down in tears the first time she came to me as her prior preparer 'fired' her and she was bereft.  We worked it all out and she never cried again.  And, at 76, I still work because I really do enjoy the work and the money pays for my exotic dive trips and my husband cannot say a word .

I wish there was a  button for this post.  Of course, Margaret and I understand that we no longer have families to support.  We both enjoy working and are able to feed our personal pleasures and pay it forward at the same time.  After years and years of hard work, we are able to treat ourselves and not suffer financially.  I love to read and during tax season, I stock the "to be read" pile and my husband cannot say a word either.

[mcbreck]

Not that it has happened here but I love threads about how much people charge on other boards. Guy in Manhattan charging a massive sum and declaring it to all as if it is representative of the rest of the country. Another degrading people for how little they charge in Pine Bluff Arkansas compared to San Francisco. Another guy declaring their minimum is $750 because they are "experts" which implies everyone else is less than.

 

Again, this hasn't happened in this thread but I find it hilarious on other boards.

[Sara EA]

Degrading other tax pros because of their fee structures doesn't happen here thankfully.  Occasionally someone will mention a fee and others will encourage them to up it because no matter where they live, they are giving their talent and work away.  $75 for a 1040 with SCHs A and B--no way!

Of course those who live in expensive areas have to charge more because their rent, property and state taxes, utilities, personnel, etc. cost way more.  What matters is what's left over for you.  Someone who charges $750 for a return may end up with $400, the same as someone who lives in a less costly area but charges $500 for the same return.  I wonder if HRB fees vary from place to place.  Anyone know?

Specialized knowledge warrants premium prices above and beyond the expected hourly rate.  Many preparers do not do estates, trusts, partnerships, corps, returns with foreign income, etc.  Those who do should feel no guilt charging for the effort and expense they put into acquiring those skills.  Some preparers have developed niches in cryptocurrency.  I bet they charge a lot--and they should.

Increase your fees at least enough to cover your increased expenses.  Bear in mind that office supplies have gone way up and postage keeps increasing.  Hopefully there will be enough to cover some pro bono work for clients who truly need but truly can't afford you.