Is $400 too much for this tax return?

Client is a little bit of a late filer, but that's OK because it offers off season work and he doesn't complain about penalties.

He's a good $ client in that I file 3 easy entity returns for him for $1200 each (flat rate) and a personal return for him for $550 (no bookkeeping, etc - just simple tax prep). My hourly rate is very high on these as a result.

He has another 1120s with $1100 in sales and 2 expense categories for a slight profit, no debt, and a simple bank balance.

I don't want to offend him because he is a lucrative part of my book, but on the other hand, I don't want to sell my self short on an 1120s, even with 3 income and expense entries ( I still should get paid for my knowledge of how to do the rest of it and the convenience of him being able to hand it to me and not worry about it).

Is $400 too much or too little?

I think you're entitled to set a minimum charge for a return. A 1040 client had a small, non profitable c corp and she was always complaining about what her CPA charged (she's also my hairdresser). I informed her that she was being charged the minimum rate. She finally closed the corp and is operating as a sole proprietor.

Probably too little, but not too far off.

I'd probably be at about $500 for that. One of my relatives has an s-corp similar to this. I think I charge him $450.

My hourly rate is very high on these as a result.

We always end up doing what we want to for the price we want, even if it takes a while to get there. It sounds like you're satisfied with the fees. 1065s, 1120-S are complex and clients shouldn't expect them to be cheap, even if it only takes 30 minutes of time (which they should never know). They have landmines, require specialized knowledge, and have additional compliance overhead for both you and the client.

I think $400 is very fair to the client (I would likely be materially higher). After preparing the federal and state returns and asking the questions necessary to compute basis, I wouldn't be surprised if your realization on this one is lower than the other three.

My minimum S Corp fee is $500. If you establish a minimum its easier to justify the cost as you can provide that you consistently charge nothing less than that ( on average, always one of situations).

It would remain at my minimum fee for the type of entity. Each year, every client receives my minimum fees and they understand that it applies to EACH entity unless we have another agreement stating otherwise. It exists for a reason. If you sway once, you'll sway 50 times and many more thereafter.

So..my minimum is $1,400.

Yesterday a client came to me with a partnership of siblings that were paying a life insurance policy since 2008. The policy required premiums of 25K annually and finally paid off $1 million.

They NEVER filed a 1065 as they had no activity really.

Well now they have about $1,000 in interest income.

I quoted them $1,000 to do the return which included a calculation to balance the equity accounts as 2 brothers paid premiums for the others during hardtimes.

We all have to establish a min. charge for entity returns no matter how simple, unless you believe in doing free returns to kkep a client happy. Often times a client's family will get an EIN for the estate but there is no income/deductible expense that runs through the 1041. You need to file a final 1041 otherwise IRS hounds them. I have filed a final 1041 for $100 just to close out the EIN on that estate.

He has another 1120s with $1100 in sales and 2 expense categories for a slight profit, no debt, and a simple bank balance.

I don't want to offend him because he is a lucrative part of my book, but on the other hand, I don't want to sell my self short on an 1120s, even with 3 income and expense entries ( I still should get paid for my knowledge of how to do the rest of it and the convenience of him being able to hand it to me and not worry about it).

Is $400 too much or too little?

You'll also need to keep track of basis which goes on IRS form 7203 on 1040.

So..my minimum is $1,400.

Yesterday a client came to me with a partnership of siblings that were paying a life insurance policy since 2008. The policy required premiums of 25K annually and finally paid off $1 million.

They NEVER filed a 1065 as they had no activity really.

Well now they have about $1,000 in interest income.

I quoted them $1,000 to do the return which included a calculation to balance the equity accounts as 2 brothers paid premiums for the others during hardtimes.

I like how you stick to your guns and hold up the integrity of our profession.

You'll also need to keep track of basis which goes on IRS form 7203 on 1040.

I agree, and I also have to answer his questions and tell him how to fix his problems, such as when he filed a 1099DIV when he takes an s corp distribution (from a different entity). But the point remains that the work doesn't often stop with the 1120s preparation.

We all have to establish a min. charge for entity returns no matter how simple, unless you believe in doing free returns to kkep a client happy. Often times a client's family will get an EIN for the estate but there is no income/deductible expense that runs through the 1041. You need to file a final 1041 otherwise IRS hounds them. I have filed a final 1041 for $100 just to close out the EIN on that estate.

I agree and I feel like you can get more than $100 for this, given the cost of software, e-filing, and the structure you created to do it.

When you consider overhead and the mere fact that your time is being utilitized, it be hard for a client to have merit
about complaining over a $400 fee for a business returns. Not many other places would charge less that $400 i think and he/she feels comfortable with you.

$400 is low. Just a suggestion to make a price more digestible for a client... my invoices list in detail every new item on the return over the prior year, like the 7203. When I talk to a client, I talk in detail about all the work I did for them first, before giving them the amount they owe me. Most clients do not understand all the work we do and if you don't explain it, they have no clue.

When asked for a price before starting the work, I give a range and not a set amount. Some items you didn't foresee may come up, you usually don't know until you start preparing the returns.