Engagement Letter - Ongoing Retainer Issue

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#1
TAXTAX  
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My individual tax client just asked me a question about a tax issue concerning his business.

I told him about my hourly rate and the retainer I needed. In the email, I briefly talk about how retainers work. I told her that i will need 2 hours' fee as retainer. When it goes near to the 1 hour mark, she will have to replenish the retainer.

This may be a one time engagement or there may be more tax issues coming up. How should I address this in the letter?
Would any one be able to send me an engagement letter on this issue as a sample?

Or would you not send an engagement letter and just have her to pay you two hours retainer, then send a complete bill her after the job is done.
 

#2
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All of my engagement letters indicate the client may be subject to a nonrefundable deposit of at least 50% of the estimated fees, or 100% if agreed upon fee.

In this case, I would simply get the engagement letter and then send an invoice for the retainer/deposit and make sure you feel it is sufficient to cover bulk of work. It does not make much sense to bill in 2 hour increments if it is something that takes 6+ hours.
 

#3
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For two hours of general business tax questions I probably wouldn't use an engagement letter. I'd just bill based on time used.

Why are you going to stop work at the 1 hour mark if they've paid a 2 hour retainer? Why not at the 2 hour mark? I would think that would irk most clients.
 

#4
TAXTAX  
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i agree with you both. I would probably tell the client that I would stop working when 2 hours limits is up. And I probably do not want to issue an engagement letter.
 

#5
ATSMAN  
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My individual tax client just asked me a question about a tax issue concerning his business.


TaxTax what was the tax question? Is this a Sole Prop?

If this was a relatively simple question that does not require more information or research, I would simply invoice the hourly rate x hours (rounded up). Otherwise a separate engagement letter regarding business tax issues would be put in place because the initial question may lead to more questions and you guys know the drill.
 


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