Fee Schedule

Hey everyone, I'm glad to have become a member. I have started a new tax preparation service and concluded all of my education requirements and to help get set up, I would hope some of you can provide some insight on preparation fees and if they are fair. So far this is what I have determined for the new filing season this month so hoping to be fair or around what everyone else would charge. Also, if this post may be conflicting, I will delete without an issue. I thank you all for your time and consideration:

2018 Individual Tax Returns/Forms Fee Schedule Fee
Federal Income Tax Return
Form 1040 - Simple Return w/out Dependents (Formerly 1040EZ) $75.90
Form 1040 - Tax Return with Dependents $189.90
Form 1040X - Amended Federal Tax Return $109.90
Form 1040NR - Federal Form Non-Resident $39.90
Form 1041 - Income for Estates and Trusts
Preparation of above forms include wage statements such as W-2 and 1099.
Forms Required with Federal Return if Applicable
Form 1116 - Foreign Tax Credit $49.90
Form 2106 - Employee Business Expense $49.90
Form 2441 - Child Care Credit $49.90
Form 2555 - (Pages 1-3) - Foreign Earned Income $189.90
Form 3903 - Moving Expenses $19.90
Form 4562 - Depreciation $49.90
Form 4797 - Sale of Business Property $69.90
Form 4868 - Automatic Extension 6 mo. $39.90
Form 4952 - Investment Interest Expense $19.90
Form 4972 - Tax on Lump-Sum Distributions $49.90
Form 5329 - Additional Taxes on Qualified Plans $49.90
Form 5695 - Residential Energy Credit $49.90
Form 6251 - AMT - Alternative Minimum Tax $19.90
Form 6252 - Installment Sale Income $69.90
Form 8283 - Noncash Charitable Contributions $39.90
Form 8582 - Passive Activity Loss Limitations $39.90
Form 8606 - Nondeductible IRA's $49.90
Form 8829 - Home Office Expenses $99.90
Form 8863 - Education Credits $39.90
Form 8889 - HSA - Health Savings Account $19.90
Form 8938 - Statement of Foreign Assets $19.90
Form 8949 - Sales and Other Dispositions of Assets $10.90
Form 8959 - Additional Medicare Tax $19.90
Form 8960 - Net Investment Income Tax $19.90
Form W-7 - Application for ITIN Free when having filed tax return within our firm, otherwise $99.90
Forms not included in this list will be subject to fee schedule based on complexity of the form in which requires attachment to your federal return.
Business Tax Preparation- Active or Inactive
Form 1065 $300.90 + additional forms and schedules
Form 1041 $300.90 + additional forms and schedules
Form 1120 $300.90 + additional forms and schedules
Form 1120S $300.90 + additional forms and schedules
Non-Resident and Part-Year Resident Returns $75.90-$125.90 each
Interviews, Consulting, and Analysis Invoiced at *Standard Hourly Rates for complex, or lengthy issues only. $100.90-$129.90 per hour
Schedules, Worksheets, and Attachments - $35.90-$75.90 each
Schedules Required with Federal Return if Applicable
Schedule 1 - Additional Income and Adjustments to Income $10.90 if applicable in your situation
Schedule 2 - Additional Taxes $10.90 if applicable in your situation
Schedule 3 - Nonrefundable Credits $10.90 if applicable in your situation
Schedule 4 - Other Taxes $10.90 if applicable in your situation
Schedule 5 - Other Payments and Refundable Credits $10.90 if applicable in your situation
Schedule 6 - Foreign Address and Third Party Designee $10.90 if applicable in your situation
Schedule 8812 - Additional Child Tax Credit $19.90
Schedule A - Itemizing Deductions Schedule $60.90 + additional cost for each schedule or form completed for Sch. C
Schedule B - Interest and Divident Income $39.90 + $4 per entry
Schedule C - Self-Employment Income $75.90 + additional cost for each schedule or form completed for Sch. F
Schedule D - Capital Gains and Losses $45.90 + $4 per entry
Schedule E - Rental Property Income $60.90 + $30 for each additional property
Schedule F - Farm Income $75.90 + additional cost for each schedule or form completed for Sch. F
Schedule H - Household Employer $75.90 for each form
Schedule K-1 - S-Corporations and Partnerships $25.90 each
Schedule SE - Self-Employment Tax $19.90 per form
Notary Public
Legal Document Notary $10.90 per signature
Free to all Clients

Welcome to the Forum! I don't know what fees are in your area but I personally would recommend that all fees be whole dollars.

Welcome! I agree with Cathy also. What was the reason to include cents?? In the retail world they play mind games by pricing $99.99 instead of $100

I am assuming your prices are in line with your market because if you underprice or overprice it is difficult to correct after the word gets out.

Be aware Notary fee is often set by state statute so confirm first with your state of residence. And I agree that you should round to whole dollars.

I would suggest keeping your fee structure more simple. for example, simple returns $200, medium complexity returns $300, more complex returns $400+. I've never been a fan of tallying up a fee by each form or schedule. as time goes by you will get a better feel as to what to charge for each type of returns time and complexity.

I hope you don't plan on publishing this full list (maybe just a few of the key forms, to give people an idea). Publishing your fee for every single form and worksheet is just asking for arguments with clients, for example, "you are charging me more for the form than the tax calculated on the form!". Most clients don't care about seeing fee itemization, for example it's not something H&R normally provides to customers.

Also, if you are a Circ 230 professional, you have to honor published prices for at least 30 days after the last date they appeared to the public, so troublesome if you find you need to change some.

Be aware Notary fee is often set by state statute so confirm first with your state of residence. And I agree that you should round to whole dollars.

Yes I have set the fee with respect to the WA State Board of Notaries. I will update the fee schedule to set a price to a base.

I hope you don't plan on publishing this full list (maybe just a few of the key forms, to give people an idea). Publishing your fee for every single form and worksheet is just asking for arguments with clients, for example, "you are charging me more for the form than the tax calculated on the form!". Most clients don't care about seeing fee itemization, for example it's not something H&R normally provides to customers.

Also, if you are a Circ 230 professional, you have to honor published prices for at least 30 days after the last date they appeared to the public, so troublesome if you find you need to change some.

No I will not be showing this to the client, just as a resource for my employees.

I would suggest keeping your fee structure more simple. for example, simple returns $200, medium complexity returns $300, more complex returns $400+. I've never been a fan of tallying up a fee by each form or schedule. as time goes by you will get a better feel as to what to charge for each type of returns time and complexity.

This is understood. I will try to base my schedule according to more of a tiered approach.

Thanks!

I am assuming your prices are in line with your market because if you underprice or overprice it is difficult to correct after the word gets out.

Not sure what part of the PNW you are in, but I think you are underpricing yourself. If you feel the need to have a discount to entice new clients, I would encourage you to show a discount on the first year's fees rather than reflect "standard" pricing lower than competitors. As noted above, it's difficult to increase prices and this is a bump year for most professionals due to new and more changes in tax law.

I am assuming your prices are in line with your market because if you underprice or overprice it is difficult to correct after the word gets out.

Not sure what part of the PNW you are in, but I think you are underpricing yourself. If you feel the need to have a discount to entice new clients, I would encourage you to show a discount on the first year's fees rather than reflect "standard" pricing lower than competitors. As noted above, it's difficult to increase prices and this is a bump year for most professionals due to new and more changes in tax law.

I priced my fees based on a book example set by a education I took in the income tax school which placed standard prices. I agree with what you say the fees should be higher and to be honest, I do not know where to begin, some preparers base them on hourly plus forms, some based on forms, I wanted to do so by forms only and the main reason I posted on here to get some enlightenment on more season preparers.

I would keep track of your time incurred per client so you can compare the internal "form fee" to the billable time based on an hourly rate. I'm sure we have clients that we can spend $1,000 (or more) of time on Schedule C alone. Schedule E can be very complicated especially in the first year where you are setting up a depreciation schedule. $61 will never cover the billable time.

The form fee approach might work with the simplest of returns but I've never used it and would not recommend it to anyone. Don't shortchange yourself.

Rates seem like "minimum wage" chain stores who employ ESL students charge far more.

Form 1040 - Simple Return w/out Dependents (Formerly 1040EZ) $75.90

Not sure what your input costs are, but personally every client return costs me $22 of direct costs ignoring the indirect ones.

That means I'm down to $54 of profit on a "simple return" given your pricing structure. Not in an area I'd like to be...

I think the major problem is that one form/schedule for one client can vary greatly in difficultly vs another client. E.g. two clients each have one rental. One is very organized and has everything in Quickbooks tied-out, ready to go January 5th. The other has a shoe box of receipts/napkins, bank statements, and gets you his info April 5th while having recollections during the prep process.

My compliance pricing structure is a base fee, which generally includes one federal and one state tax return and two hours of prep, research, correspondence, whatever. Material time over usually results in an increased billing.

Agree with the others. I'm a fan of whole dollars.

Rates seem like "minimum wage" chain stores who employ ESL students charge far more.

Agree. But OP's profile indicates he/she isn't a CPA or EA. Maybe it's fine...but it seems like a quantity approach rather than a value/quality approach.

I would keep track of your time incurred per client so you can compare the internal "form fee" to the billable time based on an hourly rate. I'm sure we have clients that we can spend $1,000 (or more) of time on Schedule C alone. Schedule E can be very complicated especially in the first year where you are setting up a depreciation schedule. $61 will never cover the billable time.

The form fee approach might work with the simplest of returns but I've never used it and would not recommend it to anyone. Don't shortchange yourself.

Funny, I find that if I charged by the hour my revenues would decrease. I form/schedule to not shortchange myself!

I'm being a bit tongue-in-cheek here. I actually think that it's a good idea to use both hourly and form/schedule pricing. I set up my tax software with price points, and every page with calculations that has to print out has a charge. I pay for software to calculate taxable social security, and my software calculates a fee for that. I pay for software to calculate depreciation on 100 assets, so it calculates a fee for each asset. All of the six schedules to the 1040 will have a $5 charge just for ink and toner or kilobytes of size in a PDF file (if I was in a higher COLA it'd be higher). Before I print the return, I look at what the form/schedule pricing adds up to, I look at my billable time in dollars, and I also look at what I charged last year. My price to a client is based on all three factors.

I also have a strict separation between accounting and tax work, so I really don't have a $1,000 Schedule C preparation cost out there...

I would suggest keeping your fee structure more simple. for example, simple returns $200, medium complexity returns $300, more complex returns $400+. I've never been a fan of tallying up a fee by each form or schedule. as time goes by you will get a better feel as to what to charge for each type of returns time and complexity.

This isn't a bad idea in theory, but I'm a behavioral economist at heart, and the reality of such a system makes it hard to institute price hikes. It's the same problem as I have with the OP charging $75.90 for a "simple" 1040 w/o dependents for $75.90 which becomes $189.90 if they have a child. Do you really pass on a 150% increase because your client had a child?

Form 1040 - Simple Return w/out Dependents (Formerly 1040EZ) $75.90

Not sure what your input costs are, but personally every client return costs me $22 of direct costs ignoring the indirect ones.

That means I'm down to $54 of profit on a "simple return" given your pricing structure. Not in an area I'd like to be...

I think the major problem is that one form/schedule for one client can vary greatly in difficultly vs another client. E.g. two clients each have one rental. One is very organized and has everything in Quickbooks tied-out, ready to go January 5th. The other has a shoe box of receipts/napkins, bank statements, and gets you his info April 5th while having recollections during the prep process.

My compliance pricing structure is a base fee, which generally includes one federal and one state tax return and two hours of prep, research, correspondence, whatever. Material time over usually results in an increased billing.

Agree with the others. I'm a fan of whole dollars.

Thank you for your input. My software doesn't charge me by the return but I pay roughly $828 annually to use the software. They are all free unless the client chooses a refund anticipation loan which is $20. They also state the software is free with 75+ bank products.

I would keep track of your time incurred per client so you can compare the internal "form fee" to the billable time based on an hourly rate. I'm sure we have clients that we can spend $1,000 (or more) of time on Schedule C alone. Schedule E can be very complicated especially in the first year where you are setting up a depreciation schedule. $61 will never cover the billable time.

The form fee approach might work with the simplest of returns but I've never used it and would not recommend it to anyone. Don't shortchange yourself.

Funny, I find that if I charged by the hour my revenues would decrease. I form/schedule to not shortchange myself!

I'm being a bit tongue-in-cheek here. I actually think that it's a good idea to use both hourly and form/schedule pricing. I set up my tax software with price points, and every page with calculations that has to print out has a charge. I pay for software to calculate taxable social security, and my software calculates a fee for that. I pay for software to calculate depreciation on 100 assets, so it calculates a fee for each asset. All of the six schedules to the 1040 will have a $5 charge just for ink and toner or kilobytes of size in a PDF file (if I was in a higher COLA it'd be higher). Before I print the return, I look at what the form/schedule pricing adds up to, I look at my billable time in dollars, and I also look at what I charged last year. My price to a client is based on all three factors.

I also have a strict separation between accounting and tax work, so I really don't have a $1,000 Schedule C preparation cost out there...

I would suggest keeping your fee structure more simple. for example, simple returns $200, medium complexity returns $300, more complex returns $400+. I've never been a fan of tallying up a fee by each form or schedule. as time goes by you will get a better feel as to what to charge for each type of returns time and complexity.

This isn't a bad idea in theory, but I'm a behavioral economist at heart, and the reality of such a system makes it hard to institute price hikes. It's the same problem as I have with the OP charging $75.90 for a "simple" 1040 w/o dependents for $75.90 which becomes $189.90 if they have a child. Do you really pass on a 150% increase because your client had a child?

Thank you for the response. I like the idea of keeping the pricing simple/tiered. But where there's so many forms/schedules etc, it makes it difficult to pinpoint where to exactly start my pricing/hourly rate/per form/schedule.

How do you all feel about the law changes this year? HR Block is lowering their prep fees considering the simplified 1040 method as issued the new tax year. They are anticipating lower revenues and posted a lower estimate based than before with respect to the new changes.

HR Block is lowering their prep fees considering the simplified 1040 method as issued the new tax year.

Not sure what this means... What is the "simplified 1040 method"?

Are you competing with H&R Block? Is your target demographic exactly the same as theirs?

If no and no, I wouldn't pay any mind to what they're doing... Zero. Focus on projected time spent at your current billable rate. Focus on value pricing.

The majority of my clients this year are paying more year-over-year. Some are getting an inflation increase of 3-5%, others are getting a substantial increase for increase in complexity. Some new clients have signed on in the past few weeks and are paying 50-100% more with me this year than a prior CPA last year. It's because this year they have way more complexity/activity and I've explained this to them along with my value.

The prospects whose primary consideration is price...those are the ones you don't want.

A minority of my clients are getting lower fees this year as opposed to last year. This is primarily clients that own CFCs...had to deal with Sec 965 last year.