What should a it cost to do a return?

The cost depends on several factors, most important is the size of the accounting firm that did the work and the number and type of transitions listed on the 4 investment accounts.

I think it is fair to say that 99.99% of clients do not prepare their tax return before they bring the information into their accountant. That said, I suspect you are the type of client that demands 1000% from their accountant and probably expects to pay a premium for that level of service. $50 should not be one of the choices.

The example you gave isn't really auditing, it's basic processing and account balancing. Yes, if IRS finds an error like that in processing your return they'll fix it and send you a notice about the change.

Did you try the experiment in the opposite order, namely letting the accountant organize your documents and ask you questions about them? Did you share your results with the accountant? How long did it take the accountant?

If you already know the answer (what you paid the accountant) or have an opinion (which of your three options *you* think is reasonable), why not provide it? Is this a guessing game?

Could you please package your questions into one newsgroup posting so there is coherent thread to follow? Or at least, continue the discussion in just one thread.

Other than what Phil Marti replied, I would guess, no. For example, if you don't file, and after some years the IRS generates a default return for you based on what they have from third-party reports, they will not calculate any special capital gains tax rates, even if, for example, they know you have qualified dividends or long-term capital gains distributions.

-Mark Bole

I would need more information. Are you tracking passive losses for the partnership? Do the investment accounts include dividends? Interest? Stock sales? Foreign tax credits?

The IRS should correct any withholding or tax payment errors.

Anyway, what was the incorrect change? How much were you charged?

Vince DiChiacchio, CPA

All the investments had dividend, interest, stock sales and foreign tax credits; but they were all laid out on the 1099s. No passive losses on the partnerships.

Well, since no one will come up with a figure, I was charged $1,800. Seems high to me.

Ted wrote: [...]

I think without looking too hard you could have gotten an accurately prepared return for less than that (or, looking harder, for more), but there are so many factors that go into a price that it's pretty hard to comparison shop on just one transaction.

You started by saying you have always done your own returns, and you only visited an accountant this year because you "figured it would be worthwhile to make sure it was done correctly." I look at what you paid as a form of insurance on your return, since "the numbers involved were rather higher." For the price you paid, I would certainly expect some additional consultation and assistance be provided at no extra charge if you ever are audited, or if you have planning questions for the coming tax year.

Others who go to a tax preparer every year do so for reasons in addition to insurance, such as to free up their own time for better uses, or because they aren't able to deal with the complexity. It doesn't sound like those reasons apply to you.

-Mark Bole

A lot of it has to do with where you're located. I live in a small town near Harrington in central Delaware but work in Annapolis Maryland. The fees in Annapolis are considerably higher than the fees in Harrington Delaware, but are comparable to the fees charged in Wilmington Delaware.

It also has a lot to do with the number of transactions reported on your 1099s. For example, if you have one stock sale the total cost would be less than if you had 50 stock sales.

Your return also includes two businesses. Granted they are small schedule Cs but they are businesses nontheless.

At FULL rate, in our office a personal return with two schedule Cs, a Schedule B, a Schedule A, a Schedule E for the LP and a resident state income tax return would around $1,500 to $1,800 or so but could be more. On the other hand, if the ONLY items on the Schedule Cs were income, with no expenses at all and no fixed assets for depreciation I would likely discount the return some.

Also, for what its worth, I seldom discount returns for new clients OR clients who come in after doing their own returns who are looking for me to reduce their tax liability. My job is to do the returns right, NOT to reduce your tax from what you might have gotten. Also, new clients almost always take considerably longer than returning clients because I have find out all about you and your situation.

And what most accoutants know, but few will say - there is sometime a premium added to a return for a client that may be percieved as problematic or even potentially problematic. If I get the impression that the client is going to take up a LOT of my time, over and above what I would normally spend on a similar return, I assess a premium to the return.

We also bill on a fee schedule basis and NOT by the hour. So it doesn't matter how long it takes or doesn't take for us to do a return. Whenever possible we try to meet with all new clients BEFORE doing the current year's return. During this meeting we review their prior year returns, discuss any issues we find, and quote a fee for what that return would have cost had we done it. This gives you an idea of what it costs to have us do your return.

Believe me, the LAST thing any accountant wants is to finish a return for a new client just to have the client balk at the fee and refuse to pay. Then all we've done is wasted our time and yours and built nothing but BAD feelings - no body wins.

All in all, it sounds like the fee was most likely reasonable, Gene E. Utterback, EA, RFC, ABA

Thanks for the explanation. Originally he told me it would be $1,000, but billed me $1,800 because he had underestimated the amount of work.

BTW... I did it on TaxCut because I am used to it and helped me organize.

The fee is probably higher than I would have charged, but there may be justifications; for example, foreign tax credit could have been subject to limitations, stock basis difficult to determine, etc.

Vince DiChiacchio, CPA