Drake falling short, in a big way. How do I bill for this?

Drake has chosen not to support the two new Portland-area taxes this year (Metro SHS income tax and Multnomah PFA income tax). There's no way within Drake to fill out the forms, calculate the tax owed, add it to the "Results" letter, or anything like that. And no e-file.

This is embarrassing for me as a tax pro, because from what I can tell, do-it-yourself tax software (Taxact, Turbotax, etc) will be capable of handling them, e-file and all. I could be wrong about that, but that's the gist of what I've been hearing from contacts at the Portland Revenue Division.

What would you bill for a couple of filings that the software should be able to handle, but can't, and therefore will require a lot of extra work? If Drake supported e-file of these forms, it might average 5 minutes of work per client, times 150 of my clients who are likely subject to the tax. Since Drake doesn't support the forms, it's going to probably average 20-30 of work per client. Maybe more.

(It will be particularly difficult to handhold some of my clients through the process of registering on the Portland Revenue website, which wouldn't be necessary at all if I could e-file the forms through Drake.)

Drake has certainly fallen short for me in the past, but this definitely takes the cake!

For 150 clients, I think you have to find a way to make this work. Maybe find a different software provider to use for those specific clients?

For 150 clients, I think you have to find a way to make this work. Maybe find a different software provider to use for those specific clients?

That's definitely an option on the table, but 1) transitioning to new software would almost certainly end up taking more time than the 20-30 minutes per client that I'm estimating it'll take to file the returns outside the software if I stick with Drake, and 2) my best guess is that Drake will support e-file of these forms next year. So I think this is a problem that (hopefully!) is limited to 2021 only.

Drake does not do Ohio cities very well either but there's not much I can do except for make it work and I file my 2553's with the IRS's PDF because drake does not allow you to provide enough information for late filing relief

Well. I have said this before. You need to evaluate the tax prep software that you use to see if it meets your business needs. If Drake is not dealing with those forms BUT you need to do deal with them for a lot of clients get the software that works.

I have sometimes done one off forms for a few clients manually because the cost and hassle of changing software midstream is prohibitive. But If I had to deal with them on a regular basis, I would start looking at other software right after tax season ends to get ready for next season.

...start looking at other software right after tax season ends to get ready for next season.

Absolutely. But the thing is, I believe that that's going to be Drake, because my best guess is that they're going to add support for these forms in the offseason. (I could be wrong.) Otherwise, I'd go ahead and switch right now, without hesitation.

But back to my original question: Any suggestions on how I should bill for this?

I could imagine thinking about it this way (at the risk of getting laughed off of this forum):

1. What would I charge to prepare/file the new Portland tax returns if my software were fully capable of doing so? Maybe $50, on average. Some of these filings will be very simple, others won't.
2. If I were to stick to my typical hourly rate, what would I need to charge to to file these returns outside of my software (Drake)? Maybe $120, on average. Maybe more. Plus the non-billable hours I'm putting in now trying to figure out how to deal with all of this. Let's go with $150.
3. So ... that's a difference of $100 per client, times 150 clients, equals $15,000. That's the cost (to me, in the value of my time) of choosing to charge $50 -- which is what I feel like I should charge, in all fairness to my clients.
4. Let's assume, though, that this is a one-year blip, and that Drake will fully support these forms beginning next year. What if I choose to overcharge slightly -- say, $60 (yearly, on average) instead of $50? That's $10/client, times 150 clients per year, or $1,500 per year. Do that for the next 10 years. I'd (eventually) break even.

I'm not saying I have any right to break even on this, but I could at least structure a decision this way.

Tough spot, sorry.

Like JAD, I also recommend finding a quick service that will do these, and use it in the interim while you consider switching software in the off season. There's nothing online to choose from that do these only and do them fast and cheap?

I would also petition drake about it, and explain that you'll have no choice but to leave them next year.

Alternatively, can you have an assistant do them? Train them up real quick and leverage your time?

What would I charge to prepare/file the new Portland tax returns if my software were fully capable of doing so? Maybe $50, on average. Some of these filings will be very simple, others won't.

I would suggest $99 minimum, unless already engaged with a good client and then it would be $79.

Unless I was hungry for work, I would turn any away (for non-clients) that seemed complicated.

Can you call/look around and get some comparable quotes?

times 150 of my clients who are likely subject to the tax.

If my back was against the wall, I would figure out the average time it takes to do these city/county tax returns manually and try to hire a temp that I can teach quickly or I would do it and bill @billable rate.

I don't do it now but I used to do that for the one off Homeowner Association returns, 5500 etc. Not fun but I did that to keep the business relationship.

Obviously with 150 clients you have to make some business decisions real quick. I would NOT take on any new clients subject to those returns.

I should have added that I'm a solo practice, and have never hired anyone before, and wouldn't have the foggiest idea how to go about doing that. While it's certainly a good idea, in my case I think it would more questions than it answers.

I don't know of any service that I could pay to handle these returns for me. They're brand new, they're not simple, and they require all sorts of attachments (original 1040, schedules, W-2's, some K-1's, some 1099R's, etc). I don't know how or when such a service would have had time to come into existence, and they certainly wouldn't have a proven track record that I could rely on.

Maybe I'll re-think this and see if I can justify a price closer to $100, as suggested above. That still wouldn't make me 'whole', but maybe I could charge that much for year 1, and think of it as inclusive of a "setup" fee. And then drop the fee down to something more reasonable in year 2, once Drake builds these returns into their software. (I mean, I sure as heck hope they do.)

And of course, I'll look into switching software for next year, just in case. ATX and ProSeries are probably in my price range. Does anyone here use either of those, and can confirm that the Portland-area PFA and SHS returns are included and e-filable in those software packages?