need to stay away from out of state clients like Mass

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#1
zl28  
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Had a client that moved from Mass to NY.

What a nightmare Mass part year return is.

Very annoying.

I guess gets a little more complicated, bc while a part year resident of Mass

worked from her home for a job in Maine....so have to file a Maine tax return

and take a credit on a part year Mass.

Point is..i could have finished 2 other returns start to finish by the time i finish this one.
 

#2
novacpa  
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Hope this aggravation is reflected in the Invoicing to your client.
 

#3
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Northern MI and Coastal SC
Multistate clients require a much higher fee. Clients need to suck it up and deal with it when they know they have these circumstances, or even when they simply know multiple states are involved. I have some that file in 10-15 states and I HATE IT.
 

#4
JAD  
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It can be a real pain, but sometimes there is just some upfront time to identify the rules of the new state. After that, the preparation can become pretty easy, especially when you consider that often there is very little net tax impact to the client after considering the credit for taxes paid to another state.
 

#5
ATSMAN  
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Part year state tax returns can be challenging. The key is to allocate the income correctly in your tax software. I routinely do MA, NY, ME part year allocations. NY is the toughest.

Charge by the hour because you never know how much time you will end up spending to get the correct results.
 

#6
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I understand that you can do more returns when they are simple - but don't resent it too much. Instead embrace it and the expertise it requires.

Some returns will take more time than others and that's just part of it. Especially this time of the year.

I agree that you can and should be expensive here. If you already underquoted, consider being honest with the client and let him know that the tax return is more involved than as presented (be specific as to why), and if he would mind paying you "x" amount so you are not working away for hours and hours for a loss. I usually go with an outrageous amount, then discount it to a reasonable amount because "you like the client and want to give him a good deal". I also hint that I will refer him somewhere else if he is not willing to pay.

Just take your time to figure out residence rules and then allocate any non-specifically sourced income accordingly.

PY to PY with investment income is generally the hardest - but really you can just put your head down and go item by item and get it done.
 

#7
zl28  
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thank you for responses....i have to really remember to tell clients when part year is involved fee is higher than usual b/c there is xtra work. actually seems the software (proseries) does have places to enter the part year and non-res data....i've never done that before; have always done on the form.

nevertheless, ty for feedback!

frustrating to do 2 states you don't do often with part year in 2 diff't states...gets messy and time consuming!
 

#8
CathysTaxes  
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I embrace it as a challenge. I have one client that needed eight state returns. It would have been more if you count the reciprocal states that I had him do an updated state W4.
Cathy
CathysTaxes
 

#9
TaxCut  
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California
I hear ya.

Sometimes it's hard to tell that a return will require more time. When charging more after the fact is difficult or maybe uncomfortable but I still want to help, I just tell the client that it requires more time than I have right now and will either file an extension or do it when I have the time to focus on it.

If the client insists that they need it asap, I'll address that it will cost more because I have to put other returns on hold. They have the option at that point to go elsewhere or pay the higher fee.

I view billing as more of an art than a science.
 

#10
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Yeah, I totally understand what you mean about billing.

Often, if I make a big mistake on an estimate, I'll just eat the one year and then send a short and polite letter with advanced notice of what it might cost next year assuming the same complexity.

I'll also learn from that big mistake next time I quote something similar.

But this depends on how the situation was represented, too. If the client was not forthcoming, then I will politely explain that I'm losing money and ask for more. If the client refuses, I might still finish for the same rate given my time investment at that point, but I'll likely fire the client when it is completed. This is usually quite satisfying. The heck with them if they expect you to lose money on a tax return when they were not forthright about its complexity.
 


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