FAQs
- What should the customer know about your pricing (e.g., discounts, fees)?
Fees are based on the national averages. Some places are lower, many are higher. My focus is to give you the best value for your money. Here is an article from 2019 from Investopedia to give you an idea of what average fees are: There’s no standard fee for tax-return preparation. Most preparers charge a flat fee per return, but some may charge an hourly rate. There are many variables that can determine what you’ll pay for this service. Type of return. The type of return you file affects the price you’ll pay for preparation. According to the National Society of Accountants, the average fee this filing season for preparing Form 1040 with Schedule A to itemize personal deductions, along with a state income tax return, is a flat fee of $294; the average fee for Form 1040 with the standard deduction, plus a state income tax return, is $188. As you add schedules to your return, the fees increase. For example, the average additional fee for Schedule C for a sole proprietor/independent contractor is $187. The additional fee for Schedule D to report capital gains and losses is $109. The additional fee for Schedule E to report rental income and losses is $136. So individuals whose returns require Schedules A, C, D and E pay an average total fee of $726. 2 Many preparers have increased their fees this season. Your location. Fees vary considerably across the country. Those in the Southeastern U.S. pay the lowest fees, while those in New England and on the West Coast pay the highest.3 Expertise of the preparer. The credentials of the preparer (explained later), as well as his/her experience, also have an impact on the fees that are charged. For example, a certified public accountant (CPA) usually charges more than an enrolled agent. Determine Your Needs Before you select the person or firm that will help you, decide what you require. Complexity. The more complex your return, the more you’ll pay for preparation. This is because you’ll likely need a more experienced preparer. For example, a person with investments classified as passive activities may face higher preparation fees because the preparer must make determinations (e.g., whether there has been a complete disposition of the activity that enables carried-over losses to be claimed in full) and not merely fill in the numbers. Volume of work. An individual with one rental property likely will not pay the same fee as another person with 10 rental properties, each requiring numerous entries on Schedule E for rental income and expenses, including depreciation calculations.4 Special situations. An individual involved in certain types of transactions may require additional time and advice for tax preparation. For example, if the person has a “listed transaction,” which the IRS has designated as an abusive transaction (e.g., syndicated conservation easements for claiming high charitable deductions), this requires another form to disclose it on the return as required by tax law; the preparer may also offer advice about what to do with the investment going forward.5 Select the Best Preparer for You After taking into account your tax-preparation needs, you should look at the type of preparer that can meet those needs. Your choices for a paid preparer include: Attorney – a person licensed by state courts or state bars to practice law. Some may have an advanced legal degree in taxation. Working with an attorney offers attorney-client privilege for any matters discussed. Certified public accountant (CPA) – a person who has passed the Uniform CPA examination and is licensed as a CPA. A CPA may specialize in tax preparation and planning. Enrolled agent – a person who has passed the Special Enrollment Examination and has completed continuing education courses. Like attorneys and CPAs, an enrolled agent has unlimited representation rights before the IRS.6 Annual filing season program participant – a person who is not an attorney, CPA or enrolled agent but has completed the IRS’s Annual Filing Season Program. Such a person has limited representation rights before the IRS. PTIN holder – a person who is not one of the above but has obtained a Preparer Tax Identification Number (PTIN) to file tax returns this filing season; he/she has limited representation rights before the IRS.