AccountingTaxes

Tax Preparation Fees for 2017 Tax Returns

“How much do you charge for tax returns?”

Of course this is a common question from new and prospective clients during tax season. The answer is that I simply use the published national average fee for tax services as a benchmark. Those rates are published by the National Society of Accountants (NSA) here.

This is a very brief summary of common scenarios taken from the NSA web site: $275 for a federal and state return the includes a Schedule A itemized deductions, $175 for a federal and state return without itemized deductions, $450 for a federal and state return that includes a Schedule C business tax return. The NSA web site includes more information that clients can use to determine national average tax preparer fees.

The actual dollar amount of your fee is printed in the engagement agreement that we electronically sign in advance of the work and also in the electronic invoice that is presented and paid prior to the completion of tax preparation service.

In other words, the price for tax preparation service is clear, in writing, and agreed to in advance.

Why?

Prospective clients and sometimes other accountants ask why I use this national average pricing method. After all, tax preparation fees in this local region are higher than some other parts of the country. Also, CPAs typically charge more than non-professional tax preparers. Most business advisers recommend that CPAs should not attempt to compete on price against non-professional preparers. These are all valid points.

There are several reasons I use this national average fee method: 1) It is simple and requires little extra effort in setting pricing policy, 2) it is easy to communicate value, 3) It prevents prospective clients from ‘price shopping’ which is inefficient for all of us, 4) since tax preparation is a small part of my overall service, this method de-emphasizes tax preparation service feed in the  discussion and allows us to focus on much more valuable topics like tax and financial planning, and 5) it offers a mechanism where I can reflect the overall lower overhead expenses I incur while offering a virtual office vs. walk-in office setting.

It is not my intention to be a low-priced tax preparer and yet this specific value-oriented method works well for me.

Need more information?

Please ask.

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