Fee schedule for tax preperation service

I am getting set up to offer tax prep services this year. One of my biggest questions is what to charge for the service. I am planning on focusing on 1040 return this first year.

I was thinking of offering 2014 price match and ask the see what they paid last year and match it if there are no changes.

The problem is that I have never paid someone one to prepare my taxes. I have no idea what is being charged other than the reported 200-250 national average I saw in an article.

I have the TaxAct evaluation copy and It asks me to enter a price for each form

Take a dummy return with a selection of key forms to H&R office and ask them to give you a quote, last time I was there they had a little desktop utility for on-the-fly fee estimates based on per-form.

If you join NATP, look for "2014 NATP Tax Professional Fee Study" which includes some statistics on per-form fees for the most basic forms.

thanks makbo

Found these price lists from other tax practices using a quick Google search:

http://www.benfranklintax.com/Form.pdf
http://www.summittaxsolutions.com/Prices-2014.pdf

http://www.taxesinmexico.com/2014%20Tax%20Returns%20Website%20Price%20List.pdf
http://kempharvest.com/files/2013/11/Tax-Fee-Schedule-Tax-Season-2014.pdf
http://www.newburghtaxservice.com/media/Price%20List%20%28Web%20Version%29.pdf

All these price lists are public. I will say that I am in CA, and I have never worked at a tax practice that charged less than $250 for a long form. That was the base rate. I'm sure it's less than that in other parts of the country.

Thanks Tax_Writer I saw most of those.

What are other common charges other than the per forms?

I saw someone charged for the e-file.

Why not just charge for your time?

I saw someone charged for the e-file.

Most offices do not charge for e-filing, although software companies do continue to charge tax professionals for e-filing. Remember that tax practitioners are specifically prohibited from charging a fee for direct deposit.

I agree with Chris that it's better to just charge for your time, choose a billable rate and stick with it, but don't be afraid to give people an average cost or a minimum prep fee.

I agree with Chris that it's better to just charge for your time, choose a billable rate and stick with it, but don't be afraid to give people an average cost or a minimum prep fee.

My only problem is that with a bill rate is that this would be my first tax season and I would not want to be charging for the time it takes me to review certain situations that I encounter for the first time and other time wasting issues that might happen because for my newness to the industry.

I was thinking of how to bill for the people who waste my time. Like bringing i form at a time and having a million questions.

Surely that is where time billing can be effective? You can say tho the client "I spent Y hours extra in preparing your return so my bill is $100Y higher than it should have been. Here's how we can work more efficiently..." End result - one well-trained and happy client. If he becomes an ex-client, what have you lost?

I agree w/ Sumwun. 2 tax returns might be identical. One client is organized, one isn't. The one that is disorganized pays more. But part of the training of the client should take place up front. That is, in advance, tell the client precisely what you want and how you want it presented. If it's a mess after that, that's the client's fault. Client has been warned. The time it takes to unravel the mess is "good time" and should be billed.

My only problem is that with a bill rate is that this would be my first tax season and I would not want to be charging for the time it takes me to review certain situations that I encounter for the first time and other time wasting issues that might happen because for my newness to the industry.

Fair enough. Then do not bill for that time. That, I would call, "bad time."

I think NATP fee study is very good...
I do a few airline employees, so I watch the competition from the ones that claim to be the airline experts.
Here's a couple
http://flightax.com/experience-flightax/fee-structure/

http://pilot-tax.com/experience-pilot-t ... structure/

I think NATP fee study is very good...
I do a few airline employees, so I watch the competition from the ones that claim to be the airline experts.
Here's a couple
http://flightax.com/experience-flightax/fee-structure/

http://pilot-tax.com/experience-pilot-t ... structure/

Thank you Sidmid21


I am thinking of a per form fee structure plus extra time fees

When I first started I did offer a price match and got burned real bad. I was getting taxpayers who paid $50 to get a 1040 with Sch A! Now I only quote after I review their last 3 returns and current year tax documents. If the prior return can be amended to get a bigger refund I will do it for free!

Now I only quote after I review their last 3 returns and current year tax documents.

That's pretty smart.

If someone who says they been filing does NOT want to show their prior tax returns, I can pretty much tell that they have had some tax problems that will come to bite me if i don't do my due diligence. Over the years I have learned that I save a lot of money and get better sleep if I keep my self away from problem clients. It is not worth the fee they will pay me for one return and then I am dealing with all their problems!

If someone who says they been filing does NOT want to show their prior tax returns, I can pretty much tell that they have had some tax problems that will come to bite me if i don't do my due diligence. Over the years I have learned that I save a lot of money and get better sleep if I keep my self away from problem clients. It is not worth the fee they will pay me for one return and then I am dealing with all their problems!

Excellent advice for all of us.

I do a mix of per form and time. I explain up front that a 'shoe box' will incur an hourly rate (usually my assistant's rate) to compile and total documents. Clients will generally take the time to compile and total receipts, and if they don't, they've been forewarned. Sometimes I'll get a bundle of receipts with a sticky on top with eg. Office supplies and a total. I'm fine with that.

Lately I have been noticing a lot of "Fixed Price" offers. For example 1040 with 2 W2, 2 1099-R, 2 1099-Int for $100 etc.

I get asked that question routinely. I will only quote after a review of their last 3 returns and completing my checklist and many have walked away!