CPA cost for handling Tax Return - Is this too much?

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Chris25
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CPA cost for handling Tax Return - Is this too much?

Post by Chris25 » Tue Feb 02, 2016 8:05 pm

Hi everyone,

I normally file my tax returns through turbotax, but due to AMT, stock options and rental income, I'm looking to have a CPA handle my tax return this year. I just talked to one today, and he mentioned that their "base fee" for filing a tax return is $650, which seems crazy high for filing a tax return no matter what is included. The price may go up from there if additional work is necessary. For what it's worth, the guy was very knowledgeable and thorough based on my conversation with him. If the price was a bit lower, I'd work with him in a heartbeat. Other than the few areas above, the only other thing which may take time to file would be some capital gains/losses from investments. From reading online, I see most people expect to pay around $200 (give or take) an hour for one.

Since this is my first time filing my taxes through a CPA, I wanted to check here and get an opinion or two on what you guys have seen in the past (or paid yourselves) to see what is reasonable. I'm also going to be checking with a few more CPA's in my area to do some price comparisons.

Thank you in advance for any feedback.

Thanks,
Chris

CedarWaxWing
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Re: CPA cost for handling Tax Return - Is this too much?

Post by CedarWaxWing » Tue Feb 02, 2016 8:15 pm

I would ask him how he gets to that number... if he says his usual hourly charge is 150 per hour and it takes 4-5 hours, that makes sense. If he says it will take him 2 hours... but his minimum is your quote....

I would say you need someone else.... or discuss why he should go over his hourly rate.

For the first time return... and if it is complex in any way..... the first return will cost more most likely... but after he has your info on things like depreciation, etc.... the following years should not be too bad... but you do need to get him to explain all that.... to fully understand how he charges, and what to expect on future returns.



M.

bsteiner
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Re: CPA cost for handling Tax Return - Is this too much?

Post by bsteiner » Tue Feb 02, 2016 9:38 pm

Chris25 wrote:... I'm looking to have a CPA handle my tax return this year. I just talked to one today, and he mentioned that their "base fee" for filing a tax return is $650, which seems crazy high for filing a tax return no matter what is included. .... For what it's worth, the guy was very knowledgeable and thorough ....

Since this is my first time filing my taxes through a CPA, I wanted to check here and get an opinion or two on what you guys have seen in the past (or paid yourselves) to see what is reasonable. ...
You could probably find one who's not so knowledgeable who would charge less.

renue74
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Re: CPA cost for handling Tax Return - Is this too much?

Post by renue74 » Tue Feb 02, 2016 9:46 pm

I live in Charlotte, NC and pay that much for our taxes.

There are a number of unique things....rental income, installment sale on some real estate, 3 different K1 statements for LLCs, etc.

Find a CPA who you will use for a while...so they can become aware of your situation. But, also, keep tabs on your returns. Learn why she/he did what they did and become knowledgable.

For years, I just sent my "stuff" to the CPA and didn't care to look at them. Now each year, I learn more and make it work to our advantage.

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msi
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Re: CPA cost for handling Tax Return - Is this too much?

Post by msi » Tue Feb 02, 2016 10:08 pm

Mine was $690 last year here in NJ, which included schedule C and gift tax return. I give him my 1099's and spreadsheets, and he does the rest, answering whatever questions I have. Very intelligent and thorough guy.

My old CPA who retired the year prior was always in the $500's from memory. His office wasn't in as expensive of an area, but he was very competent, too.

I don't know how much more complex AMT, rental income, and stock options really make a return, but I don't think the price is unreasonable for a good CPA's time.

NOVACPA
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Re: CPA cost for handling Tax Return - Is this too much?

Post by NOVACPA » Wed Feb 03, 2016 2:21 am

i had long response written, but the forum deleted it so here: http://blogs.wsj.com/totalreturn/2013/0 ... ly-charge/

I charge $850 for a 1040 as a base fee. Its a threshold price to weed out the W2 only people since I do this as a side gig.

$1250 for any business returns. I waive this for 990s.

When my friends call for advice, I ask one future planning question for which they have no answer and then I tell them to call Turbotax...

jackholloway
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Re: CPA cost for handling Tax Return - Is this too much?

Post by jackholloway » Wed Feb 03, 2016 2:36 am

Mine run about 800.

jackholloway
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Re: CPA cost for handling Tax Return - Is this too much?

Post by jackholloway » Wed Feb 03, 2016 2:39 am

NOVACPA wrote:i had long response written, but the forum deleted it so here: http://blogs.wsj.com/totalreturn/2013/0 ... ly-charge/

I charge $850 for a 1040 as a base fee. Its a threshold price to weed out the W2 only people since I do this as a side gig.

$1250 for any business returns. I waive this for 990s.

When my friends call for advice, I ask one future planning question for which they have no answer and then I tell them to call Turbotax...
Is this a specific future planning question, or do you run through a list? (Mine had a filter question or two as well)

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Toons
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Toons » Wed Feb 03, 2016 6:50 am

"Other than the few areas above, the only other thing which may take time to file would be some capital gains/losses from investments."

I believe my return is a little move involved than that.
Fed+State efile cost me 15.99 this year using TaxAct.
To answer your question though,Yes I consider it too much. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Cigarman
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Cigarman » Wed Feb 03, 2016 6:51 am

Mine runs about $1500 but includes my sub chapter S business return (self employed). My wife and I go through the return each year before filing and have caught some mistakes/omissions on the part of the CPA. Note, he does all my quarterly reports and did an extremely good job when I had a sales tax audit for my business.

Personally I don't have the time or energy to delve into all the aspects of filing taxes. His fee does include state and federal taxes + any annual reports required by my state (minimal, but necessary). My guess is if you gave your info to 10 CPA's all of them would come back with a different number that you owe and/or get back. You might want to have him do the taxes and after filing find someone using Turbo Tax and do them yourself to see how the numbers compare after the pressure of filing has past. That would give you an idea of what your should be doing long term. Yes, I know it is $650 but what if he saves you $1000 over what Turbo Tax comes up with? Then you are ahead of the game. (Unless Turbo Tax is infallible but of course it can only calculate taxes based upon the information you feed it.)

Cuzz35
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Cuzz35 » Wed Feb 03, 2016 7:23 am

I think if you really want to know if its too much you should get quotes from other CPAs. Everyone here can tell you how much there's cost but that will not help you. From my perspective, most people posting these types of questions and saying its ridiculous are getting a bargain. Not a real minimum at my firm but there's a blended rate between $200-$300 so 3-4 hours is going to cost about $750-$1,000.

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BL
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Re: CPA cost for handling Tax Return - Is this too much?

Post by BL » Wed Feb 03, 2016 8:35 am

Perhaps find an enrolled agent experienced in that area, instead of a CPA, as it really doesn't sound very complicated (and I think you could also do it yourself if you take some time to study the regs.) Of course, if you use a CPA for other purposes such as planning, it may be well worth it.

dbr
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Re: CPA cost for handling Tax Return - Is this too much?

Post by dbr » Wed Feb 03, 2016 9:21 am

I think it could be reasonable. You may know your return is not overly complex but you are also paying someone to be sure you are right about that.

It is also reasonable to conclude that it is worthwhile to do the return oneself stopping to learn about new items. An option is to pay up the one time to make sure one understands things correctly.

Advice to get quotes from more than one might make sense, but it is also possible to find cheap people who do not know what they are doing.

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Artsdoctor
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Artsdoctor » Wed Feb 03, 2016 9:50 am

Chris25 wrote:Hi everyone,

I normally file my tax returns through turbotax, but due to AMT, stock options and rental income, I'm looking to have a CPA handle my tax return this year. I just talked to one today, and he mentioned that their "base fee" for filing a tax return is $650, which seems crazy high for filing a tax return no matter what is included. The price may go up from there if additional work is necessary. For what it's worth, the guy was very knowledgeable and thorough based on my conversation with him. If the price was a bit lower, I'd work with him in a heartbeat. Other than the few areas above, the only other thing which may take time to file would be some capital gains/losses from investments. From reading online, I see most people expect to pay around $200 (give or take) an hour for one.

Since this is my first time filing my taxes through a CPA, I wanted to check here and get an opinion or two on what you guys have seen in the past (or paid yourselves) to see what is reasonable. I'm also going to be checking with a few more CPA's in my area to do some price comparisons.

Thank you in advance for any feedback.

Thanks,
Chris
By definition, it sounds as if you're uncomfortable with the added complexity of your return.

The fee is not unreasonable. There are added benefits to using a CPA, not the least of which is education. Don't just think of his fee as something that is paid to complete your tax return; think of it as teaching you about the tax code. Learn what he does, and then perhaps you won't need to use him every year in the future. Another part of using a good CPA, is knowing that your forms are completed appropriately; while a CPA is not a guarantee to prevent a nasty letter from the IRS, the CPA is in a better position to avert a mistake as well as respond to any letter that may come your way regarding the return.

Topic Author
Chris25
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Chris25 » Wed Feb 03, 2016 5:36 pm

Thanks for all the feedback guys. Since my OP, I did check with 2 other advisors in my area and based on my situation, they're all in the $400-650 range.

I think the first reply kind of set me straight, in that this is more of a you get what you pay for in this scenario. The fact that this guy gave me clear answers and seems non-BS oriented is a major plus for me. I was kind of concerned in a quality drop with a price drop as well. I feel like it would be difficult in the Washington DC area to find someone this good for less. Since this is my first time going through a CPA, I want to make sure it's all done right. I am definitely outside of my realm of comfort for my return, so I think the post above is 100% correct that the money is well worth it.

Think I've basically made up my mind after a little research and the input here. I'm going to have this CPA handle the return.

Thanks again for the quick feedback!

pinhead
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Re: CPA cost for handling Tax Return - Is this too much?

Post by pinhead » Wed Feb 03, 2016 5:46 pm

Mine run around $1K for personal and business returns AFTER a 50% friend discount. I dont mind the fees when she is able to save me more.

Nowizard
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Re: CPA cost for handling Tax Return - Is this too much?

Post by Nowizard » Wed Feb 03, 2016 6:03 pm

Unless your income is quite substantial (More than $200 an hour on hourly basis), or unless you just hate to do taxes and your documents are not well organized, I would do them myself using the interview method with TurboTax since you are familiar with TT. If your data are organized, it should not take more than three hours, and if it is not organized the CPA will up charge you in all probability. I just "made" $200 an hour for doing our return based on a CPA quote, and ours sounds as involved as yours. To each his/her own, however.

Tim

William104
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Re: CPA cost for handling Tax Return - Is this too much?

Post by William104 » Wed Feb 03, 2016 6:17 pm

This thread is helpful for me as I must be paying too much. Was just charged 570 bucks for "2015 Projections". I assumed on the 2nd year of having an S corp and him doing all of our filing previously that we'd see some reduced cost. Guess I was wrong!

sadie wess
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Re: CPA cost for handling Tax Return - Is this too much?

Post by sadie wess » Wed Feb 03, 2016 8:25 pm

bsteiner wrote:
Chris25 wrote:... I'm looking to have a CPA handle my tax return this year. I just talked to one today, and he mentioned that their "base fee" for filing a tax return is $650, which seems crazy high for filing a tax return no matter what is included. .... For what it's worth, the guy was very knowledgeable and thorough ....

Since this is my first time filing my taxes through a CPA, I wanted to check here and get an opinion or two on what you guys have seen in the past (or paid yourselves) to see what is reasonable. ...
You could probably find one who's not so knowledgeable who would charge less.
+10

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