Tax planning is worth 5 times tax prep

Fees for tax planning and advisory services average as much as five times those for tax preparation, according to a recent survey of practitioners.

The study from Intuit Accountants, Tax Planning and Advisory Insights Survey, found that the average annual fee for tax planning and advisory services was $2,351, versus the industry average for individual tax preparation of $459.

Among the other survey results:

• Almost three-quarters (74%) of tax firms offer planning services, but less than two-thirds (62%) get paid for them;
• Those who do offering tax planning and advisory services provide them to one out every three clients;
• A third of preparers who are not currently offering tax advisory services are considering offering them; and,
• Only 18% of tax advisors lead with tax planning and advisory services.

“We see a widening gap in the profession between firms who lead with tax preparation and traditional compliance services and those that lead with proactive tax planning and advisory services,” said Barry Pennett, senior vice president and general manager of Intuit ProConnect Group, in a statement. “Firms that communicate the estimated tax savings from appropriate strategies are better able to help clients reach their short- and long-term financial goals, as well as monetize these services.”
The survey also covers a number of related areas, including pricing strategies, where just under two-thirds (63%) still rely on the hourly billing model.

Intuit’s study surveyed 786 tax professionals in August of 2021.