In a study conducted by the National Association of Tax Professionals at the end of the 2008 tax season to determine the commom pricing methods at all Tax Professionals. The methods they found were:
1. Fee for each tax form or schedule
2. Fee based on last year's fee plus an additional fee for any changes in a client's tax situation
3. Minimum tax return fee plus an additional fee based on the complexity of the client's situation
4. Value-based fee based on the subjective value of the tax preparation service,
5. Hourly rate for time spent preparing the tax return, and
A set fee for each item of data entry.
You'll want to ask how they determine their prices, and what they estimate your tax preparation service might cost. But because of per-item, per-form, or per-hourly rates, it might be impractical for an accountant to provide you with an accurate price quote. Accordingly, you'll want to ask accountants for a likely price range for your tax return.
A CPA Moms does not give estimates, they give you a exact rate they you are going pay and if you have a refund they will take their fee from your refund.
Average Prices for Tax Preparation Fees according to the National Association of Tax Professionals reports the following average prices charged by their members:
Average for 1040 with Schedule A and state return: $205
Average for 1040 with state return: $115
Average hourly rate: $122.12
Average Prices at Franchised Tax Offices
H&R Block: $187.17 per return average for 2008 tax season
Jackson Hewitt: $188.96 per return average for 2008 tax season
The fees charged by the chains and as reported by the National Society of Accountants are fairly similar. So these average prices may represent a sort of range for average prices charged.
Find Out What's Included in the Tax Preparation Fee
To help you determine if your tax preparation fee is appropriate, be sure to ask the accountant exactly what's included in the fee.
Do they charge extra for electronic filing?
Do they charge extra if you need a copy of your tax return later in the year?
Does the fee include a tax consultation or planning meeting where you can ask questions and received advice on how to minimize your taxes?
Some firms, especially the franchise chains, charge an extra fee for audit protection. This is basically a way to prepay for any costs associated with an audit of your tax return. So you should ask the accountant how they charge in case your return is audited, or if they will correct any mistakes they make free of charge.
Additionally, find out how the tax professional will charge if you call up later in the year to ask a tax question, or need copies of your documents, or need to respond to a letter from the IRS.
Each CPA Mom uses a their own personal method for setting prices for tax preparation services. The price for tax preparation services increases depending upon the complexity of the tax return.
A CPA Mom will quote a price before they start working on your tax return and it will be the same price when they finish.
The general information in this publication is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purpose of avoiding tax penalties.
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