HaitiMDParticipantStatus: PhysicianPosts: 21Joined: 08/03/2018
$450 for both myself and spouse (3 W2s, 4 1099s), only downsides were that he took 2 months to complete them, didn’t know what a back door Roth IRA was and was confused as to how much I could actually add to my i401k. Luckily, I knew the answers to these thanks to this site/forum 🙂
We are still going to do tubotax this year thoughpmj78910ParticipantStatus: PhysicianPosts: 4Joined: 07/26/2018
$2600 for 2018 return which was just filed. (Long delays for some K1s). I’ve also noticed a dramatic upward trend in the fee over the past 7 years.
I have no idea how much our 2019 tax prep will be. Do most people get the estimated fee before the taxes are filed? Our CPA does all of our tax prep, files the return, and then we get his bill a few weeks later. I’m trying to figure out if this is standard practice.September 10, 2019 at 12:45 pm MST #245091jfoxcpacfpModeratorStatus: Financial Advisor, Accountant, Small Business OwnerPosts: 8137Joined: 01/09/2016Do most people get the estimated fee before the taxes are filed? Our CPA does all of our tax prep, files the return, and then we get his bill a few weeks later. I’m trying to figure out if this is standard practice.Click to expand…
It is pretty much standard practice (and the way we did it up until about 12 yrs ago before changing to flat fees).September 10, 2019 at 12:49 pm MST #245094pmj78910ParticipantStatus: PhysicianPosts: 4Joined: 07/26/2018September 10, 2019 at 12:54 pm MST #245095Vagabond MDParticipantStatus: PhysicianPosts: 3477Joined: 01/21/2016
Got it. Thanks. Might be time for a discussion with my CPA.Click to expand…
Ditto. Our CPA charges by the hour, and I see the actual bill, but it is mostly meaningless. I can plug all of my data into tax prep software in under two hours (once I have assembled it). I understand that I am also paying for service and expertise and a second look, but I have the sense that I am paying more without getting an additional service, expertise, or the benefit of a second look.
"Wealth is the slave of the wise man and the master of the fool.” -Seneca the YoungerSeptember 11, 2019 at 9:42 am MST #245281DavidGlennCPAParticipantStatus: AccountantPosts: 60Joined: 06/12/2019
Agreed on all the complaints about hourly billing. There’s a sort of movement in the CPA industry away from hourly billing to fixed price/value pricing approach. When I worked at a firm that billed by the hour one of the partners described our billing approach as a “duck and cover”, as in we’d send out the bills each month and duck and cover waiting for clients to complain (rightly so) about the bill. The issue wasn’t so much the total dollar amount but the fact that it was a surprise.
It’s much better from the client and CPA point of view to price up front. I’d see if your CPA would agree to a fixed-price arrangement, especially since they’ve been doing your return for years and know what goes into getting it done.
David Glenn, CPA | Glenn Advisory
https://www.taxcpafordoctors.com | (808) 321-5664September 11, 2019 at 11:41 am MST #245329BmacParticipantStatus: PhysicianPosts: 313Joined: 10/21/2017
@Vagabond MD, you seem to be in the exact same boat as me. We have been paying a CPA for years to do our taxes. Complexity of the returns and cost to have them done quite similar to yours, it would seem. Every year I say to myself, “Why don’t I just use TurboTax?” But my (perhaps dubious) rationalization for sticking with the CPA is the reassurance that I can get all my tax questions throughout the year answered quickly and easily (admittedly not that many questions) and have a professional manage an IRS audit that seems more likely given our tax bracket (despite this never having happened). Maybe in 2019 I will use TurboTax to do our taxes (but not file them) and compare it to the return from the CPA and see what, if anything, is different. And if different, how so and if the difference ends up being a net win for TurboTax or the CPA.Vagabond MDParticipantStatus: PhysicianPosts: 3477Joined: 01/21/2016@Vagabond MD, you seem to be in the exact same boat as me. We have been paying a CPA for years to do our taxes. Complexity of the returns and cost to have them done quite similar to yours, it would seem. Every year I say to myself, “Why don’t I just use TurboTax?” But my (perhaps dubious) rationalization for sticking with the CPA is the reassurance that I can get all my tax questions throughout the year answered quickly and easily (admittedly not that many questions) and have a professional manage an IRS audit that seems more likely given our tax bracket (despite this never having happened). Maybe in 2019 I will use TurboTax to do our taxes (but not file them) and compare it to the return from the CPA and see what, if anything, is different. And if different, how so and if the difference ends up being a net win for TurboTax or the CPA.Click to expand…
I did H&R Block’s software product on my taxes last year, and there were no material differences. I use it for my kids, and it took less than 90 mins to quickly fill in our numbers to compare.
It seems that every year there is one new tax wrinkle to justify using a CPA tax preparer. For example, for 2017, withdrawing from 529 to pay for college. In 2018, it was the tax cut and delayed K-1’s requiring an extension (first time ever). In 2019, it will be earning income in two states. Etc.
Yes, there is comfort in the ability to ask a question, but it is rarely asked. Years ago, I bought state tax credits through them, referred by another party, and that is how we started together. They no longer offer these to me.
They also do very little tax planning for me, so there are sometimes wild swings between paying a small amount of tax and getting a large refund. They must assume that my income is flattish from one year to the next. We never explored my part time schedule, my withholding rate, my wife’s bonus and stock awards, my 1099 income, my second job in another state, charitable contributions, etc. to optimize estimated taxes (which I calculate on my own). They never suggested an i401k (or even a SEP-IRA) for my side gig income; I told them I wanted one.
It is just a data dump and filing between February and April.
"Wealth is the slave of the wise man and the master of the fool.” -Seneca the YoungerLarry RagmanParticipantStatus: Other ProfessionalPosts: 617Joined: 08/30/2018
For reasons described by both Bmac and Vagabond MD my approach has been to do the taxes myself with Tax Act and have a CPA run a parallel check every five years or so. Well, after the first check (about ten years ago) I became much more comfortable with the tax prep software and have not kept up the parallel reviews. It is a fair point that a new complexity could and probably should make me reconsider. I do question myself when I get the occasional “letter audit” (two on 529 treatments and one on a mega backdoor Roth transaction) but I’ve survived all those just fine. However, I reached my threshold this year and hired a professional to do an estate income tax return Honestly, if I were the executor I would have done it myself for the learning experience, but my wife was the PR and she was sensitive to family politics. CPA fee well worth the peace of mind in that case. But mostly I think the real work is done up front in gathering the data, and since I have to do that anyway I may as well plug in the numbers and save a $1000 or so.TimParticipantStatus: AccountantPosts: 3079Joined: 09/18/2018
“But mostly I think the real work is done up front in gathering the data, and since I have to do that anyway I may as well plug in the numbers and save a $1000 or so.”
Makes perfect sense. The value is obviously not in the data entry. It’s have you taken advantage of every possible deduction and correctly understood the process and any changes that might impact you.
Doing the same over and over and expecting different results? Paying for that is insane (unless you have to make decisions on complex issues).hatton1ParticipantStatus: PhysicianPosts: 3064Joined: 01/11/2016
The amounts you quote were similar to what I paid with my solo practice. I think a schedule C business is more complex.
I blog at http://doctoroffinancemd.com/September 13, 2019 at 10:57 am MST #245844DavidGlennCPAParticipantStatus: AccountantPosts: 60Joined: 06/12/2019
I think @tim makes a good point. For many people it’s as simple as filling out the forms properly and it’s not a good value to pay someone to fill them out for you. The value comes in when your situation changes and there could be planning opportunities that you don’t know about. Unless you do taxes for a living there’s a lot that you don’t know that you don’t know.
I’ve seen multiple new clients come in whose situation changed and their CPA never analyzed their new situation and it ended up costing the client money. The value for the money comes from the higher level view rather than filling out the forms properly. Unfortunately, many CPAs build their practice around completing forms and not being proactive planners. I think the hourly billing model contributes to this because it makes them hesitant to spend time on planning when the outcome of the time is less certain than completing a form.
David Glenn, CPA | Glenn Advisory
https://www.taxcpafordoctors.com | (808) 321-5664HankModeratorStatus: AttorneyPosts: 1404Joined: 03/27/2017
The corporate return cost us $1525 this year for state and federal filings. We bought a fancy version of TurboTax, so that was another $90 or so.RosieQParticipantStatus: PhysicianPosts: 181Joined: 06/03/2017
What do you all think about the statement of “I might pay $x,000 for taxes but my CPA saves me at least that much in taxes each year so it’s totally worth it”. I figure that turbo tax catches all the usual stuff (salary-pretax retirement contributions HSA etc minus practice expenses -> tax bill calculated. What are these extra tricks or extra value added? Once I get all my expenses and paperwork together which I need to do regardless of who does my taxes it’s only about 2 hours or less on TurboTax to get it all together.TimParticipantStatus: AccountantPosts: 3079Joined: 09/18/2018
•“What are these extra tricks or extra value added?”
You would have to ask the person who made the statement, “my CPA saves me at least that much in taxes each year so it’s totally worth it”.
• For you, just work on your efficiency. Some thoughts:
Make electronic copies when they come in so you don’t end up scrambling to find stuff you need come tax time.
That is such a pain. Consider using a software (excel, general ledger etc) that you can upload into TT. Manual data entry is such a time waster. Two hours right there.
I wonder about flu shots. Why can’t I just pick it up and give the shot myself? Been getting them for years for free. This bit of standing in line for a pharmacist, np, or a licensed md is such a waste of talent. Which arm doesn’t seem to take a lot of training. Geez.
Great job on your taxes.
How did you do taxes before computers or TT or electronic filing? I ask that question to point out you can avoid TT too. It’s a productivity software, cost benefit. Sounds like whoever made the original statement is getting benefits. Maybe the CPA has to pry information out of the client. There is a weakness with TT. Data has to be entered exactly in the right place. It’s not always “intuitive” and things don’t printout until you have paid. Some “self preparers” don’t review or know what to look for. Happens mostly with “new items”, like disability SS payments that get repaid to a DI insurer in a subsequent year. Some people need help, some use TT, and some do the forms.September 14, 2019 at 5:38 am MST #245959