Topic

28-Oct-2022 10:24am

Hi,
I'm considering using seasonal labor this year, probably another licensed sole proprietor with capacity. I'm not sure on the proper hourly rate for this kind of labor. Anyone done this before and have a range? Thanks.

28-Oct-2022 1:36pm

On the low end, I know that many of the expat sites will hire ICs with an EA/CPA and give them 30% of gross. They are required to have their own insurance.

I have heard of 50/50 deals which is perhaps more popular with mom and pop types of firms.

Companies like Intuit generally employs their helpers, and with commissions, only pay around $20 an hour. Some HRB agents might make north of $30.

Note that it is difficult to get leverage from hired tax pros because you will likely need to help them a lot and they might not be as careful with your brand and liability issues as you will want them to be. Then they will leave and take the clients they serve with them, even with a no-compete.

28-Oct-2022 2:47pm

Appreciate the feedback. I would be having them only do tax prep. I would review and sign all returns that they would have no communication with the client. That might alleviate some of the concerns you brought up. Thanks so much!

28-Oct-2022 3:02pm

samclancy14 wrote:another licensed sole proprietor with

I see you are a CPA. Are you contemplating another CPA as your seasonal hire? They probably have a rate in mind.
Location and experience are factors, as well as the complexity of the work. In my area we pay $50-75/hr. for experienced people to work on complex returns

29-Oct-2022 7:12am

I had spoken with a CPA in FL about providing some services. He wanted $50/hr, which I thought was quite fair.

29-Oct-2022 5:10pm

$50/hr on w2 or 1099?

30-Oct-2022 11:38am

TaxMan2020 wrote:$50/hr on w2 or 1099?

I think that was the W2 rate. 1099 was like $20/hr lower.

We parted ways because of unexpected changes on his side, but I though the was not only very fair, but entirely too cheap--especially if he brought me business.

30-Oct-2022 2:10pm

I would have expected 1099 to be greater.

31-Oct-2022 8:36am

Just looked up his response. He wanted $45/hr for W2 and $50 for 1099. Again, super cheap.

31-Oct-2022 9:29am

CornerstoneCPA wrote:Just looked up his response. He wanted $45/hr for W2 and $50 for 1099. Again, super cheap.

Agreed...that's a bargain.

I've considered doing some contract work this busy season. With my new firm, I won't be at capacity, but I'm also not sure I want to be full. There is no shortage of one-time work to perform that will pay off. I don't want to get bogged down with deliverables and let those items get delayed.

3-Nov-2022 7:31am

CornerstoneCPA wrote:Just looked up his response. He wanted $45/hr for W2 and $50 for 1099. Again, super cheap.

This year I'm paying an experienced CPA $50 an hour via 1099. But I'm also providing an office, software (and allowing him to take care of some of his clients through that software, on his own time), and computer. It has worked well. But I've also known him for many years so we started with a strong relationship.

4-Nov-2022 2:17pm

$45-75. If you are in California you might have to pay them as an employee if they only work for you. Check out the AB5 rules to see if there is an exception.

4-Nov-2022 2:35pm

Not that it is so relevant I suppose, but in Hawaii, if you provide tax preparation services, and they are helping you provide (the same) tax preparation services, then they must be employees.

4-Nov-2022 8:15pm

In my particular case I’m paying an “S” Corporation, but I know several of the states are more aggressive than the IRS when it comes to employee classification