How much will it cost to prepare my income tax return?

•One of the most common questions we get is about cost.•Obviously, it varies by complexity of the return.•But there are some things that factor in.

Like any other business

• Per hourly fee (sometimes the fee is different depending on services)

• Fee per page (some franchises charge additional for each form). For instance, they will charge extra if you qualify for the Earned Income Credit – even though their software does all the work for them!

• Up front pricing model – give you a quote when you come in based on what you have and stick to it (with certain exceptions).

• Based on prior year – a lot of places are going to at least charge you what you’ve been paying

Ways different preparers charge

• The place I worked with the lowest hourly fee charged the highest prices.• The firm was incredibly inefficient when it came to

getting returns in and out the door.• Charging an hourly fee does not necessarily

encourage efficiency. If they take longer, they try to charge you more.

• The place I worked with the highest hourly fee charged the lowest prices.• The firm was very streamlined and efficient.

Problem with the Hourly Fee

• We try to give a price or price range up front and stick to it.• Obviously, we are basing it on how long we expect it to

take to prepare the return and how complex it is.• This avoids unpleasant surprises later on

• Our prices are often lower than our competitors• I’ve seen people get charged more from national tax

franchises than what they could get from a CPA

• We will contact you if something comes up. For instance, if you say you have three rental properties in California you forgot to mention. We will have to give you a new quote, before moving forward. This is rare, but things like this do happen.

Our model: Up Front Pricing

• Organize

• I’ve had people come in with shoeboxes full of receipts.• We are happy to do the work! However, we have to charge

more.• If you can run totals and break things down by category,

then it saves us time and you money

• For example, lets say you have high medical bills

• If you can total up out of pocket costs by category• Prescriptions $2,154• Hospital $10,841• Doctors $2,538• Glasses $256

• We don’t need the receipts

What can you do to lower cost?

• It you can total your income and list expenses by category it will save you money.

• We can tell you how to lay it out in an initial consultation.

• We will determine correct depreciation methods, enter items on appropriate forms, etc. In other words, we will prepare the tax return and give tax advice moving forwards.

• We just give you the option to do things you can do yourself to save money.

Same thing with business, rentals, etc.

• Obviously we want a copy of any IRS forms (W-2’s, 1099’s, 1098’s, etc)

• Everything else, the more organized we get it the better (for reducing fees)

• Again, if you don’t want to mess with it, that is fine. We can organize it for you. You can just save some additional fees by doing it yourself.

• You do need to keep receipts in case you are ever audited, but we do not need them if you provide us with totals per category.

• For more information, contact Derland Bahr, CPA at 254-432-5724.

Summary