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$200/hr? Really??

post #1 of 18
Thread Starter 
This is what our new tax prep person told us she charges. Is that REALLY the going rate? Or is this a matter of her seeing what the last tax prep co charged us (one of the reasons we are not using them this year) and inflating her rate? We live in a rural/somewhat blue collar community so I have a hard time digesting this. What do you think?
post #2 of 18

My DH is a CPA and he charges more than that per hour BUT

He's a manager and he doesn't actually get that much since he doesn't work for himself. He works on corporate tax returns. The more difficult it is the more it costs. He also works 65 hours on a tax return for example but only charges for say 20 because people complain about paying too much. How many people are working on your return? How complicated is it? It's always amazing to me that one of his clients who is very rich through family money not money they personally earned hates to pay any taxes. We personally hardly pay any because we are lower middle class!

Just from reading your post it sounds high but you didn't provide any information. Maybe this person will only bill an hour? Maybe they can charge that much because they are the only gig in town? Just guessing!
post #3 of 18
That does seem a little high based on what you are saying. Are your taxes overly complicated? When we owned property abroad (and we have farmland here), our taxes were really complicated and we paid about that for someone to do our taxes, but they were from a firm that particularly dealt with foreign taxes, etc. and it was in a large city.
post #4 of 18
Hmmm could be. I know a lawyer who charges $175-200/hr to do taxes. That is what his time is worth in legal matters- so why charge less for taxes. Our tax prep office charges us a flat $630. I suppose there is less than 4 hours of hands on work there- but she still has to pay 4 other people in addition to building/software/etc.

Ummm- why would anyone 'want' to pay taxes. I know people who inherited lots, run thier own business profitably and don't pay Uncle Sam a dime. You never get ahead paying taxes.... Really- only the middle class and lower class pay taxes.
post #5 of 18
Thread Starter 
Dh says our tax situation is complicated...we have a couple of out of state TIC investments - but I get a K1 for them, and the K1 schedule is not a big deal. Dh consults, so in addition to his W2 he has itemized expenses - but dh has meticulous expense reports already prepared. And then he has a big loss that needs to roll over (which essentially negates any tax burden we will end up with...) So, a little complicated, but at this stage in the game, the complicated stuff is rolling over from previous yrs- no new transactions or detective work or taxable events (in past years there were trust disbursements) This new tax prep person works from home and is a solo practicioner... She said she didn't think it would cost more that $1200. Huh??
post #6 of 18
Sounds reasonable to me. Keep in mind overhead and the fact that tax preparers make almost all of their money in just three months of the year. It's not like she works 40 hours a week 50 weeks a year at that rate. You may ask if she includes assistance with any audit from the year she prepares, or if that is extra.
post #7 of 18
Why don't you call around and get a few other prices?

If it's a tax attorney, it doesn't seem that high to me.
post #8 of 18
DH and I pay $350, total, for our combined return. It is somewhat complicated by a real estate rental and sale and prior employment in another state.

In years past, I have paid $100-$450 for a single return. The lower rate netted NO refund, whereas the higher rate got me several hundred dollars more in a refund.
post #9 of 18
Thread Starter 
I don't think she's a tax attorney - her sign says "accountant". I guess I was just surprised. She was recommended by dh's friend who is a roofer, and I guess I just figured she'd be closer to the $75/hr mark. We used to have our taxes done(when they WERE complicated) by a local guy that charged us less than $500 for everything (but he's since retired)...before that was a big firm who charged us in the thousands ( we were actively "in business")...since dh's income is so much decreased and we're going to a one-woman operation, I assumed it would be on the lower end of the scale. That's what we get for not asking ahead of time. Now it's already mid-march, she's got our stuff - and she does seem nice enough - but I can't imagine where we are going to come up with the $$ to pay her bill
post #10 of 18
That's what our cpa charged when we used him.
post #11 of 18
Sounds right, ours charged us $250 and we had 2 years to do! Shocked me until i started looking around.
post #12 of 18

I do our taxes with TurboTax, complications and all, so I wouldn't have a clue about professional tax preparation fees.

My dad used to do his own taxes with pen and paper (old-fashioned forms), but he hired a tax accountant the first year he was retired since he also had some other complications. Now, a few years later, he files online (after doing it manually with pen and paper) and he has rental properties in a different state and other complications.

It sounds like this year's taxes are a done deal and you just have to figure out how to pay the accountant. Maybe she will take payments? Like some now and the rest when your return arrives? Or some now and the rest on 4/15? Or some other mutually agreeable plan.

For the future, perhaps you could plan to do them yourself? You'd have the previous years returns to look at for guidance and you can always call the IRS for free help. The phone lines are easy to get through in January/February and get busier and busier as April 15 approaches.
post #13 of 18
Ours charges $175, sounds about right to me but it can't hurt to call around
post #14 of 18
I'm also in New England and that sounds right about average. I'd try to think in terms of the rate of pay based on the quality of her service, not on where she is located. Specifically - Do you have references for this new person? If you have complicated returns, and need the professionally experienced help and just want it to be face-to-face, then she may very well be worth it. If your taxes aren't confusing, you could use TurboTax or call the IRS to save money.
post #15 of 18
It's one thing to state hourly charges, but seriously, I would expect the CPA to give you an idea of "grand total" before you commit. My dad is a CPA and he knows exactly how long it should take him to do each person's taxes before he even begins. He tells them the expected price of the return vs the hourly rate if it is a personal tax return. For business owners that are using him for more than the "annual tax return" he goes by the hourly rate.

And a person who is an "accountant" shouldn't be as expensive as a "CPA" or a "tax attorney".

post #16 of 18
My guess is that her rates may also be based on the surge of tax work at this time of year. I know an accountant who only does personal income taxes for people in the first quarter of the year and doesn't do any work for the rest of the year.

It takes me several hours to do my own family's taxes, but I would imagine that an accountant (given their knowledge and ease with the subject) can do it efficiently in much less time. If you are bothered by the indefiniteness of an hourly charge, I would go with an accountant who charges a flat rate for varying levels of returns.
post #17 of 18
I'm an accountant at a CPA firm in a suburb of a good-sized city and that sounds normal. Remember that it may only take them a couple of hours, and that they're probably quoting a higher rate to be conservative. They'd rather come back and give you a bill for $400 when you were expecting $1200 than the other way around!
post #18 of 18
I've personally never understood the "per hour" charge on tax returns when you're dropping your stuff off and just coming back to get your paperwork. If she says it took her 3 hours, how do you actually know it took 3 hours and not just a half hour?
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