“So,” the client asks, “what do you charge?”
“This is always a thought-provoking question” from prospective clients, said Enrolled Agent and LPA Roy Frick of Fairway Services Limited and Frick Accountants Limited in Ocean City, Md. and tax professionals answer it in a wide variety of ways.
“I’m upfront with them. I ask a few pointed questions and tell them my minimum and, based on what they tell me, what I estimate the charge to be within a $100 range,” said Florida-based EA Jeffrey Schneider. “Many clients tell me that I’m too high. I tell them my experience and reputation and that I am higher than some and lower than others. Plus I stress that I’m here all year round.”
“There’s never a straight answer,” said EA Rachel Presser of Jeff Lewis & Associates, in New York. “Some firms have a set Schedule C charge, for instance. I don’t do that because preparing a Schedule C for small retailer is going to be much different than preparing one for a doctor who rakes in $500,000 a year or an artist grossing barely $20,000 a year. Their record-keeping can also be atrocious, which is going to equal more billable hours trying to get things workable.”
“By the form,” said EA Sherril Diamond of The Tax Stop in Cherry Hill, N.J. “If I use it, I charge for it. If I have to sort the client’s paperwork, too, I add a time charge.”
EA Bill Delaney in Westwood, Mass., asks for the client’s prior-year return, “Then I price it using my current fee schedule, which is forms-based. I then explain that this year’s form may be different so my fee will be either more or less,” he said, “but they now have a reasonable approximation of what to expect.”
“I’m happy to give them a range but can’t answer the question without more information,” said Joel Grandon, an EA with Joel Grandon Accounting Services, in Marion, Iowa.
“I always try to say, Well, I charge by the form or by the time it takes, so it’s very hard to give a price,’ ” added EA Ann Waller of Moss Point, Miss. “I may give a range.”
Most preparers use a similar commonsense formula often mentioning the word “depends” as well as free initial consultations, a new client’s past returns and a firm’s current price lists. “After asking more questions, I ask the client to come in, since the first consultation is free,” said Birgit “Bibi” Rudestedt, an EA with Jobi Accounting & Tax Services in Spring Hill, Fla. “If they insist on knowing, I give them an estimate.”
“As with any tax question, it depends,” said Robert Flach, a preparer for more than four decades and blogger at The Wandering Tax Pro. “I never provide a quote: I don’t know how much I’ll charge until I have actually prepared the return. The less organized the taxpayer, the greater the fee. I do have a per-form fee schedule, a minimum fee and an hourly rate, which I share with the potential client.”
Not all firms lock themselves in with a printed price. “While we have a fee schedule per form, we don’t share the schedule with clients as that is merely used as a guideline,” said Brian Thompson, a CPA with Bailey & Thompson Tax & Accounting, in Little Rock, Ark. Enrolled Agent Carlos Lopez in Salinas, Calif., also surveys the competition “to make sure we are in the ball park with other tax preparers. We estimate for our more complex clients, such as sole proprietors, partnerships or corporations, based on number of hours to prepare more complex returns,” he said.
They usually understand’
When calculating a current return’s complexity doesn’t work, Economic Planning Services in Newport News, Va., also asks for the client’s prior-year return, according to Delmar Gillette, RTRP. “We put it into our tax program, look for errors (we often find them) and from that we say, Last year we would have charged $x for your return.’ We don’t prepare any return without the prior year’s return. With that, we can generate an organizer required for all returns.”
“We do not give blanket quotes to anyone,” said EA Helen O’Planick with Heljan Associates, in Manchester, Pa. “We ask them to bring in last year’s return and we quote off that.”
Case by case is the byword for EA Kristin Roberts of The Roberts Tax Group, in Torrington, Conn. “I tell them my hourly rate but also let them know that I can’t say how long something is going to take without seeing it. They usually understand that,” she said.
For jobs hard to estimate, Roberts asks clients to agree to a pre-set amount. “For example, I say I’ll work on a job until I expend $500 of my time, then we see where we are,” she said. “I always put fees out on the table from the start. There’s nothing worse than having a client get sticker shock after they receive the bill.”
Michele Knight, owner of Knight Accounting & Technology in Keystone, Colo., charges by the form and maintains a detailed pricelist on her Web site. “Clients know in advance exactly what the price will be. If their records are unorganized and there will be extra work involved, I notify them in advance to give them the opportunity to do the prep work and save the extra expense,” Knight said. “There are occasional clients who take extra time, want more explanations and discussions, but I don’t charge extra for that. If I take the time to give great customer service and help educate them, they appreciate my service and give referrals and next year they’ll better understand their situation.”
“Over the years this question has become annoying,” said Bruce McFarland, senior tax specialist with L&R Tax Preparation in Belton, Mo. “I understand [clients’] need to price shop but calling around looking for the best deal is not the ideal way to find a tax professional.” His set response this season: “We don’t mind giving you an estimate but would like to caution you on bargain shopping for a tax professional. When you find the least expensive preparer, you more often than not are going to get what you pay for.’ We hope the perspective client will inquire so we can explain the merits of not first looking for price but for quality.”
Rather than answer the “charge” question, EA Vivian Sangunett of Ann Arbor, Mich.-based Sanguineinc provides a profile of her client base, average AGI and the types of investments or expenses that the clients have. “I offer a percentage of Schedule Cs, Es and Fs so the prospective client knows whether or not he or she is consistent with the other people in my client base.”