How much does your CPA charge?

[W2R]

I may be finding myself in the middle of a hugely complicated tax mess, that I don't want to go into on the public board. I am in WAY, way, way over my head at this point and in the past I have always done my taxes myself.

I need to get help from a reputable CPA in my local area, and have several recommendations. I don't expect it to be cheap. How do I know if the fees are exorbitant or just substantial? What does your CPA charge? What can I expect? I mean a "real CPA", not H&R Block.

 

[CuppaJoe]

On my last j*b we worked with several real CPAs and financial planners. I would expect to pay about $300/hr., where the attorneys were getting $500/hr. I've imagined being in a position where I would want to hire someone good, but bottom line for me is that I would want to work with someone who didn't know me in another context. I know a lot of good attorneys who could make referrals for my area. I have a fantasy that professionals who charge more per hour tend to be more efficient and therefore cost less in the long run. This may be an exception to the rule about paying a flat fee for the entire project. Best wishes.

 

[W2R]

Holy cow.

Thanks. At least now I won't choke when they tell me their fees (hopefully).

 

[73ss454]

I've been with my CPA for 35 years and he's always charged what I thought as a fair amount. Now that I'm retired my return is very easy and I still pay $500 + some electronic fees so it's just under $600.

This year when I received my bill it was for $1080, needless to say we had a heated discussion about this increase in fees. Turns out he charged me $300 for a phone call I made in Dec about Roth conversions and $200 for because everything he needed was not in the packet I had sent. This caused him to send me an email for the additional info he needed.

During our little talk about these fees he stated he has 300 clients and doesn't have the time to rehash any info without getting paid. At that point I corrected him about his number or clients. It's now 299. Turbo tax can't be that hard to use.

 

[W2R]

I have been using TurboTax all along, and it's great. But this time I think I need a CPA.

Thanks for the information on what your CPA costs, 73ss454. They aren't cheap. I kind of suspected that but wanted to have some idea first so your post is much appreciated.

 

[DangerMouse]

We pay between $400-$500 for our tax agent to do our taxes as well as give us ad hoc advice thru the year. She has been doing our taxes since 1998 and does a fantastic job. A friend in San Diego was using a retired CPA to do her taxes/books and he was charging her $125 an hour. The CPA's we worked thru with my company were charging $250 an hour.

I think it is important to get someone who is recommended and also who you like, as this is likely to be a long term relationship.

 

[Kabekew]

It depends what you mean by "way over my head," because depreciation schedules are "way over my head" for example but I'm sure it's pretty routine for a CPA. My standard state and federal return including schedule C from my old LLC usually costs around $800.

If you mean something more complex, all I have for reference is when I sold my business which included intellectual property and other intangibles, I had to find a way to best structure the purchase price allocation to minimize my taxes. That required the CPA firm to do research and consulting with in-house attorneys and other specialists who billed at different rates from $150 an hour to $500. My total bill for that was $10,000 but it was worth it because they saved me an extra $500K in taxes I assumed I'd have to pay.

 

[W2R]

Thanks, Kabakew and Dangermouse. It sounds like my bill would fall between $800 and $10,000, if I hired someone with the same fees as Kabakew's guy. And Dangermouse, I will definitely try to find a CPA that I can relate to, as well as one that is recommended by people whose opinions I respect and who have complicated returns.

These posts are helping. At least I won't be spewing coffee and screaming at an innocent CPA who tells me his bill for this will be $1,000 - [-]$2,000[/-] $3,000.

 

[Texas Proud]

Without knowing what your problem is.... well, nobody can tell...

As Kebekew pointed out, it could be $10,000 or even more..

You also have to be aware that the person who actually does your return (if you go with a bigger firm) might not KNOW what is best and just plug your numbers in a program they have and see what spits out... and charge you a few grand for the privilege...

 

[DangerMouse]

Something you need to clarify before you engage with someone is the Terms of Engagement. One thing I have noted from CPA is unless you give them a strict mandate they will run away and go beyond what you are asking and you will be taken by surprise by the cost. I know with our CPA at work there would be monthly telephone calls discussing what they were charging and why. Ask them for a ballpark figure and let them know that if they are going to go beyond that amount you are going to what approval and to know why it is taking longer.

 

[W2R]

Good idea, Dangermouse. I was thinking of just having him straighten out this mess, since it is not likely to be a recurring problem. I need to define what I want him to do, other than "straighten out this mess", too. Probably an amended 2008 return, amended 2009 quarterly estimated taxes, and possibly amended 2007 or earlier tax returns, all for both federal and state, plus computation of interest owed the IRS for overdue taxes due to the necessary corrections on the returns. Plus advice on some minor related issues.

I will be moving out of state next year if I can sell my house. I hope the CPA will give me records of what he did that I can take with me, so that if I need a CPA up north for this issue I can show him what was done.

Right now I feel like "audit bait".

 

[Dennis]

my CPA has averaged $500/yr.. for the past 5 yrs..
If you use a Decent Brokerage house that provides all the Stats needed ( cost basis, etc) and Your CPA doesn't have to go digging for them and if you follow his Pre Tax Ck list of items to provide? It's a no brainer now -a-days for them, with all the updated Computer Programs..

Remember, they really only use the Figures you give them, that's why your on the hook, not them if ever audited..

and a 2007 Survery made of the same Tax Return of 300 CPA Firms.. 31% Underpaid and 69% over paid the clients taxes..

They are more interested in The Client Over paying and Keep their Reputation of doing that with IRS, than shorting IRS..and be on their Black List..

 

[GoodSense]

My CPA only charges $350/year and does the following:

- taxes for my husband's business (fairly straight-forward)
- taxes for our personal taxes, which includes:
- my business as a sole proprietor
- rental property

I guess we really lucked out on that one!

 

[al_bundy]

for 2003 I paid $200 for my wife's and I taxes. would have done them myself, but she did a lot of independent consultant work that year and i didn't know how to do it. for the next few years i used Turbo Tax to handle her work. if you buy the boxed product you can save the database and import it the next year for depreciation, etc.

Intuit also has a service where you pay around $50 and they will provide a CPA for you in case of an audit

 

[prubin]

I may be finding myself in the middle of a hugely complicated tax mess, that I don't want to go into on the public board. I am in WAY, way, way over my head at this point and in the past I have always done my taxes myself.

I need to get help from a reputable CPA in my local area, and have several recommendations. I don't expect it to be cheap. How do I know if the fees are exorbitant or just substantial? What does your CPA charge? What can I expect? I mean a "real CPA", not H&R Block.

I have been a TurboTax DIYer, however, we sold our home last year and had a substantial taxable gain. We decided we needed a CPA and we are glad we did. He charged $775 for federal and California return including efiling.

 

[MichaelB]

A funny story about tax prep.

When I left my job I was covered under a tax equalization plan (int’l relocation related) and my employer had contracted with a global accounting and tax prep firm. I thought I could just use turbotax – it would be much quicker and easier, and asked the tax prep team. The manager said I could do it either way, and suggested we both do it – just for fun, and to compare.
So I did, and they did. Federal and NY state. No unusual sources of income (foreign sourced salary, US and foreign investment, US stock options) but lots of deductions related to international moving, foreign taxes, part time US and NY residency and stuff. We both completed, they sent theirs to me, I compared both and - there were differences. I send them my turbotax prepared returns. They reviewed both, corrected theirs, and sent it back to me for filing.

This was (and still is) a big 8 accounting firm...now the big 4.

Having used both for many years, I'll take tax prep SW and figure out the differences.

 

[Texas Proud]

A funny story about tax prep.

When I left my job I was covered under a tax equalization plan (int’l relocation related) and my employer had contracted with a global accounting and tax prep firm. I thought I could just use turbotax – it would be much quicker and easier, and asked the tax prep team. The manager said I could do it either way, and suggested we both do it – just for fun, and to compare.
So I did, and they did. Federal and NY state. No unusual sources of income (foreign sourced salary, US and foreign investment, US stock options) but lots of deductions related to international moving, foreign taxes, part time US and NY residency and stuff. We both completed, they sent theirs to me, I compared both and - there were differences. I send them my turbotax prepared returns. They reviewed both, corrected theirs, and sent it back to me for filing.

This was (and still is) a big 8 accounting firm...now the big 4.

Having used both for many years, I'll take tax prep SW and figure out the differences.

That's what I meant about using a big firm... some flunky (and I WAS one of them many years ago) just plugs in the numbers to a form without any thinking...

I had the same problem as you.. international pay etc., but some domestic pay for taking care of my house etc.. and I lived in Texas which threw them off their equilization... so for 3 years in a row I had to call and get them to fix the tax return...

 

[jimnjana]

Be sure to review your entire tax return, you may have made other errors or oversights that "Decrease" your taxes due, you can go back 3 years w/amended returns...

Jim

 

[nwsteve]

As others have mentioned, it is really important to have the specific things you want the CPA to do well defined. If you are really cost sensitive, I would be sure you summarized your expectaions and understandign in writing to the CPA when you finish your initial meeting. You will also want to listen closely to what he/she will have to do in order to accomplish your goals. Based on your limited comments, I can see some CPA wanting to reconstruct your entire return from primary data if you give them the chance. The time to stop these heavy handed approaches is before they get started.
One other suggestion, be sure you give them a "not to exceed without authorization" dollar amount in writing so you can at least get an early warning. At least this discipline will help to corral any misadventures their staff may have gone on. That is part of the rub. You can have a good understanding with the partner who unfortunately gives sloppy direction to his staff who do all kinds of work not salient to what you asked--of course you still get to pay if you have not put some boundaries on it.
Good Luck
Nwsteve

 

[Kabekew]

I think it is important to get someone who is recommended and also who you like, as this is likely to be a long term relationship.

I just read this and I have to agree, there is a big component to the personal relationship, whether CPA or attorney (or doctor?) for that matter. I think there is a big fear among all small business owners (having been one myself) that the person standing before you wanting your services, you just don't know if that stranger is psycho or sue-happy and you have to err on the side of caution. In CPA terms that probably means just plain "doing your taxes" and not offering advice.

If they "know" you though, or say your friend is one of their long-term clients and you mention that, I think they will open up more and offer more aggressive advice instead of being overly cautious to cover their butt. That's what I've found over the years and a few CPA's, anyway.

 

[Midpack]

Until very recently, my wife worked with/for an experienced CPA who specializes in and handles personal and business taxes. She starts at $150/hr when the tax situation is fairly straightforward, but it goes up from there with complexity. Good luck, doesn't sound like much fun...

 

[shoe]

We pay $350 for our CPA to do our fairly straightforward taxes. My husband does some consulting work and there is some extra effort involved. Want2 here's hoping you are pleasantly surprised by the cost!

 

[Ed_The_Gypsy]

I pay about $450-$500 US for my tax man to do my Canadian taxes. He charges about the same for my US taxes. I have tried it myself and also another tax guy, but there are things that can trip me up bad and I want someone to represent me.

When I finally repatriate and my tax situation is less touchy I will do it myself, unless I have a business on the side (which is possible).

I used to do our kids' taxes myself, but now they do their own under supervision.

 

[Bikerdude]

I may be finding myself in the middle of a hugely complicated tax mess, that I don't want to go into on the public board. I am in WAY, way, way over my head at this point and in the past I have always done my taxes myself.

Depending on your tax situation you may not need a CPA. If it is strictly a tax issue you may do better employing an "Enrolled Agent" to help you out.

FAQ - Professional Tax Consulting

 

[target2019]

Most don't understand that a CPA does not necessarily guarantee that the person in front of you is able to do taxes.

H&R has tax preparers. They are trained just before the season. Since the pay is os low, most move on to real work.

Enrolled Agent is a newer ballgame. The IRS testing of ER's is pretty rigorous.

The fees being mentioned here are outrageous. For most individuals I've met, Fed and State can be done in 1-1.5 hours. Based on a rate of $100 per hour, an average should be $150.

Don't expect that if you pay a lot for your tax preparation that you'll get anything else for free. However, a lot of the plug-in work is done by $10 an hour help. Buyer beware.