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Where to my tax preparation fees fit in the commercial spectrum in California?

What is a reasonable fee for straightforward 2006 tax calculations in California? How does $1,350 fit in the cost spectrum overall?

I just paid $1,350 and I don't know if that's high or low for a single individual with a single job, a second home where I junked a computer before the depreciation ran out, a single bank account, about four stock sales, $450 dollars in total charitable contributions, and living in California.

Tax calculations have finally gotten the better of me so I decided for the first time ever to have an accountant type the numbers in instead of me typing into TurboTax myself.

After spending days gathering all the data, xeroxing, stapling, collating, the information, I filled out the accountants 25 page questionaire and handed him the 1099s, W2s, and tax summaries. Within three weeks time, he gave me my completed taxes back with the following bill.

I'm not balking at the bill. I'm just wondering if it's a good price or a normal price or a bad price, that's all. I have nothing to base my "feelings" upon, so I ask you to help me with perspective.

Here is the bill. $ 250 Form 1040, US Individual income tax return $ 75 Schedule A, Itemized deductions $ 50 Schedule B, Interest and ordinary dividends $ 100 Schedule D, Capital gains and losses $ 25 Schedule D, Capital gains and losses, AMT $ 100 Schedule E, Supplemental income and loss page 1 $ 0 Form 1040-V, Payment voucher $ 0 Form 2210, Underpayment of estimated tax by individuals $ 75 Form 4562, Depreciation and amortization $ 100 Form 4797, Sales of business property $ 100 Form 6251, Alternative Minimum Tax $ 75 Form 8283, Noncash charitable contributions page 1 $ 50 Form 8582, Passive activity loss limitations $ 25 0 Form 8582, Passive activity loss limitations, AMT $ 75 Form 8801, Credit for prior year minimum tax $ 0 Form 8879, E-File signature authorization $ 0 Alternative minimum tax depreciation report $ 0 Two-year comparison worksheet $ 150 CA 540, Resident income tax return $ 0 CA Schedule CA, California adjustments $ 0 CA Schedule D, Capital gain or loss adjustment $ 0 CA Schedule P, AMT computation & credit limitations $ 0 CA Schedule W-2 CG, California W-2 attachment $ 0 CA 3582, Electronic payment voucher $ 0 CA 3801, Passive activity loss limitations $ 0 CA 3801, Passive activity loss limitations, AMT $ 0 CA 3801, Worksheet for step 4 $ 100 Assembly fee

Is this price about in the middle of what most people are paying today? Is it better? Worse? About average?

Debra

Reply to
Debra McLaren
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"Debra McLaren" wrote

The above grouping seems odd to me. Based on what limited information you posted, these don't seem to apply.

Was the second home a rental property? Did you sell the rental property? That would explain these forms and schedules if you did, but your discription is lacking any information about rental property and a sale of such property. Of course the 4797 might be related to your comment of "I junked a computer before the depreciation ran out", but that raises other questions. What did you use the computer for?

Reply to
Paul Thomas, CPA

your fee is high.....in colorado you pay no more than $150 per hour...your forms are aprox 2 - 4 hrs of work.....

Reply to
~^ beancounter ~^

Yes. It's the first condo I ever owned and I never sold it. So I rent it out 365 days a year.

No, but, I junked a computer that I used exclusively for the rental (I kept it separate from my regular computer). It just got too old. Somehow, that turned into a "sale" of the computer, I guess, even though I threw it out.

If I didn't explain it fully, I'm sorry. I tried to be succinct but accurate.

That computer was used only for the rental property as I have another computer for my personal use. Now, I just use the same computer so I won't claim anything for 2007 and beyond as keeping track of the depreciation was more work than the depreciation was worth.

Being in California, even the charities cost me more in filing than the reduced schedule A deduction was worth because the accountant charged more to fill out the Form 8283, Noncash charitable contributions than the deduction was worth.

Debra

Reply to
Debra McLaren

I was wondering how long it took the accountant to figure this all out.

Reply to
Debra McLaren

The bill looks high to me -- it may be time to look for another accountant.

.
Reply to
Steve

Yeah, some price by the form. I use that method for giving out "quotes", but adjust the final bill according to the time and effort involved.

One can not afford to set fees based on your tax benefits, such that an hour of work on a Schedule C that results in a $300 loss gets billed the same as an hour of work on a Schedule C with a $30,000 profit.

I'm not going to get into a pissing war over his fees. They are what he needed to set them at for his reasons. Fees vary for thousands of reasons, and firms just blocks apart can have hundreds of dollars differences in fees for the same work.

Reply to
Paul Thomas, CPA

It's the time of year when people call to get fee quotes, and it's like calling the garage on your cell phone standing next to your broke down car and expecting to know what the fee will be to fix it.

There are dozens of people on this newsgroup from all over the country and even the world. Ask how to get to Chicago and you'll likely get an equal number of answers. The only applicable answer is the one that starts with where you are at.

My fees are for just tax preparation, but if the business carries in a box of canceled checks and I have three weeks of accounting to get the annual numbers, then the final fee includes that.

No one knows what their fee would be till they see what their starting point is.

As far as time involved in preparing returns, there are front end and back end work in addition to the data entry. Meeting with the client in an initial interview, setting up the depreciation schedules, getting any carry forward items in place, and you haven't entered anything pertinent to the current year incomes or expenses.

There's copying/scanning source documents for the firm files, data entry, return checking, maybe calling the client for additional data, maybe more work to enter that data, another round of return checking, printing and sorting the return and preparing it for presentation to the client. I noticed the 1040V and the 2210, so I take it you owed, and if appropriate, I would have prepared 1040ES coupons as well.

Then there is the back end of meeting with the client to present the return, answer questions, maybe do one initial tax planning for 2007, and other follow-up during the year (newsletters, etc).

All that adds to the time, and hard costs, of the CPA or other tax preparer, which add to the fees.

How did you come to pick this preparer? What is his typical client base?

Reply to
Paul Thomas, CPA

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