$1200 for a CPA a reasonable amount for W2 and small LLC?

Investor · Louisville, KY · Member since 2017 · 102 posts · 80 votes

I used a CPA for the first time and just got my bill $1200. I am a W2 and have LLC with 2 properties that I've kept good records for. My return was only for $1,200...

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Emanuel Ohunwu

Rental Property Investor · Dallas, TX · Member since 2019 · 88 posts · 55 votes

@Justine Scheuher lol I paid my CPA 350 to do taxes for my rental property (a duplex), W2 and both of my stock market brokerage accounts. 1200 seems really expensive!

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Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
6y
Sounds ok
0 Reply
Justine Scheuher
OP
Investor · Louisville, KY · Member since 2017 · 102 posts · 80 votes
6y
@Account Closed Okay Thanks!
0 Reply
Chris SvendsenPro Member
Front Royal, VA · Member since 2016 · 306 posts · 240 votes
6y
Wish mine was that cheap, so yeah, sounds good to me. If I had more time I would do it myself but as they say, time is money. In this case, their time is your money!
2 Reply
David BarnettPro Member
Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
6y
That's about the price that I pay for my entity and W2 together. I also do most of the bookkeeping myself.
1 Reply
Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
6y
Important to note that refund is not directly related to how good a tax professional is either.
They should save you money in big picture strategies- but if someone magically has a way to get you way more money back, that's often using credits you don't qualify for or fake business schedules, ect - so just be mindful of that.
You can always reach out to another tax professional for a second opinion. Pricing wise it seems on point to me, but it also depends on how well the return was done as well. If there were missed deductions and such then no, it wouldn't justify the price.
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3 Reply
Kevin Paglia
New to Real Estate · Las Vegas NV · Member since 2020 · 90 posts · 46 votes
6y
I cheated. I am married to my accountant. A rockstar in industry, mostly not for profit stuff, but she was able to put together a lot of the business side for our LLC and will be the records keeper for the business.
3 Reply
Emanuel Ohunwu
Rental Property Investor · Dallas, TX · Member since 2019 · 88 posts · 55 votes
6y
@Justine Scheuher lol I paid my CPA 350 to do taxes for my rental property (a duplex), W2 and both of my stock market brokerage accounts. 1200 seems really expensive!
8 Reply
David Avetisyan
Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
6y
I concur with the above poster, 1200 sounds ridiculous.
5 Reply
Kirk R.
Peoria, IL · Member since 2013 · 967 posts · 383 votes
6y
Originally posted by @Justine Scheuher:
I used a CPA for the first time and just got my bill $1200. I am a W2 and have LLC with 2 properties that I've kept good records for. My return was only for $1,200...

wow! yours is about 10x mine. I use a licensed preparer vs CPA. Mine is probably about as complicated as yiurs. I do all the bookkeeping & then almost tell preparer what goes in each box. I WANT TO UNDERSTAND MY TAXES.
Altho sometimes my preparer is more just tax software expert. Although sometimes he has given great advice. If your CPA isn't giving you great advice & just filing I wouldn't pay that much.
2 Reply
Kirk R.
Peoria, IL · Member since 2013 · 967 posts · 383 votes
6y
Originally posted by @Kevin Paglia:
I cheated. I am married to my accountant. A rockstar in industry, mostly not for profit stuff, but she was able to put together a lot of the business side for our LLC and will be the records keeper for the business.

the lengths some people will go to get good tax advice!
3 Reply
Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
6y
I think it's important for people to realize there are levels of quality in this industry as well any.
You can go to super cuts for $12 , you can go to a mall salon for $60 , or you can go to well known stylist who charges $300 for a haircut. Everyone technically got the same service- but likely the outcomes weren't the same.
Services aren't one size fits all. What's provided, what people need, and what people find valuable vary from person to person.
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Kolodij Tax & Consulting
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7 Reply
Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
6y
I think that $1200 is pretty high, unless it also includes advice and consultations for free through out the year! Or you handed them a mess of records that took hours to sort through.
1 Reply
Casey Maeda
Rental Property Investor · 港区, Tokyo · Member since 2018 · 61 posts · 42 votes
6y
@Justine Scheuher do it yourself next year. It's easy and you learn more about the financials of your properties. Amazes me why people outsource this for simple investment structures.
0 Reply
Jack Bobeck
Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes
6y
@Justine Scheuher 1200 seems high. I know my personal is $300 and business $500. I always send them a spreadsheet of the items so to minimize their work. It should not cost $1200 if you have your items together. Keep looking for a new CPA.
0 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
6y
@Justine Scheuher. You’re overpaying by quite a bit. I paid half of that and I have quite a few more rentals
1 Reply
Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Justine Scheuher
We have a pretty complicated structure involving a number of entities, types of financing and arcane sections of the tax code.
So we pay more, but we get strategic advice AUDIT PROTECTION etc. And we changed from a very good accountant who charges about that price to a firm for whom even the complicated stuff was old hat.
Make sure you are comparing apples to apples as @Natalie Kolodij said.
Don’t know your market and I bet you could pay less, but how much do you want to scale? It always seems too much to pay when you start. How valuable to you is the start of the relationship ? How much is your time worth?
2 Reply
Russkiy Pul
Member since 2020 · 1 post · 1 vote
6y
Seems a quite high. $700-$800 is reasonable. Find another accounting firm.
1 Reply
Kelly M.
Rental Property Investor · Ellicott City, MD · Member since 2019 · 46 posts · 20 votes
6y
@Justine Scheuher
Seems high to me. My guy is $350 and he usually spends an hour and a half with me in detail working on them. He's sharp. I think I'm getting a good deal for his service, but I wouldn't pay a ton more. I have W2, plus LLC (two rental properties).
1 Reply
Heath Jones
Rental Property Investor · Enterprise, AL · Member since 2019 · 137 posts · 85 votes
6y
@Justine Scheuher
Yeah, hopefully June stays under $2000. But my CPA did get me a 15k return this year, so I guess it’s worth it 🤷‍♂️
1 Reply
Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6y
My take is the fee should be based on complexity and advice needed. If I am upset because my dog died, I can talk to a bartender ($). If I am hearing voices telling me to move to Kathmandu and teach Buddhism, I need to see an Psychiatrist ($$$).

My licensed accountant (not a CPA) charges $250 for my LLC with 20 rental properties and $250 for my personal return. I make it easy for her and my returns are not complicated for a professional.

If the returns are complex, with $00,000 decisions and requires strategic advice, you need a @Natalie Kolodij ($$$).
1 Reply
Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
6y
Originally posted by @Terrell Garren:
My take is the fee should be based on complexity and advice needed. If I am upset because my dog died, I can talk to a bartender ($). If I am hearing voices telling me to move to Kathmandu and teach Buddhism, I need to see an Psychiatrist ($$$).

My licensed accountant (not a CPA) charges $250 for my LLC with 20 rental properties and $250 for my personal return. I make it easy for her and my returns are not complicated for a professional.

If the returns are complex, with $00,000 decisions and requires strategic advice, you need a @Natalie Kolodij ($$$).

A licensed accountant? Only so many designations, CPA, EA or attorney. no such thing as just a licensed accountant.
That is ridiculously cheap. I'd be very suspect of it.
Here is a publication from the National Society of Accounts on average fees from 2016:

https://connect.nsacct.org/blogs/nsa-blogger/2017/01/27/nsa-survey-reveals-fee-and-expense-data-for-tax-accounting-firms-in-2016-and-2017-projections

$1,200 depending upon region and depending upon records is not unreasonable. We also don't know what states the rentals are in etc. His investments include K-1s etc.
You get what you pay for think about how little you're paying them and how much education costs to stay up to date.
[email protected]224-381-2660
1 Reply
Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6y
Originally posted by @Steven Hamilton II:
Originally posted by @Terrell Garren:
My take is the fee should be based on complexity and advice needed. If I am upset because my dog died, I can talk to a bartender ($). If I am hearing voices telling me to move to Kathmandu and teach Buddhism, I need to see an Psychiatrist ($$$).

My licensed accountant (not a CPA) charges $250 for my LLC with 20 rental properties and $250 for my personal return. I make it easy for her and my returns are not complicated for a professional.

If the returns are complex, with $00,000 decisions and requires strategic advice, you need a @Natalie Kolodij ($$$).

A licensed accountant? Only so many designations, CPA, EA or attorney. no such thing as just a licensed accountant.
That is ridiculously cheap. I'd be very suspect of it.
Here is a publication from the National Society of Accounts on average fees from 2016:

https://connect.nsacct.org/blogs/nsa-blogger/2017/01/27/nsa-survey-reveals-fee-and-expense-data-for-tax-accounting-firms-in-2016-and-2017-projections

$1,200 depending upon region and depending upon records is not unreasonable. We also don't know what states the rentals are in etc. His investments include K-1s etc.
You get what you pay for think about how little you're paying them and how much education costs to stay up to date.

Nothing like an opinion from someone with a vested interest. Just for your continuing education.

0 Reply
Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
6y
Originally posted by @Terrell Garren:
Originally posted by @Steven Hamilton II:
Originally posted by @Terrell Garren:
My take is the fee should be based on complexity and advice needed. If I am upset because my dog died, I can talk to a bartender ($). If I am hearing voices telling me to move to Kathmandu and teach Buddhism, I need to see an Psychiatrist ($$$).

My licensed accountant (not a CPA) charges $250 for my LLC with 20 rental properties and $250 for my personal return. I make it easy for her and my returns are not complicated for a professional.

If the returns are complex, with $00,000 decisions and requires strategic advice, you need a @Natalie Kolodij ($$$).

A licensed accountant? Only so many designations, CPA, EA or attorney. no such thing as just a licensed accountant.
That is ridiculously cheap. I'd be very suspect of it.
Here is a publication from the National Society of Accounts on average fees from 2016:

https://connect.nsacct.org/blogs/nsa-blogger/2017/01/27/nsa-survey-reveals-fee-and-expense-data-for-tax-accounting-firms-in-2016-and-2017-projections

$1,200 depending upon region and depending upon records is not unreasonable. We also don't know what states the rentals are in etc. His investments include K-1s etc.
You get what you pay for think about how little you're paying them and how much education costs to stay up to date.

Nothing like an opinion from someone with a vested interest. Just for your continuing education.

I have to say- I've never heard of this.

A CPA goes to college for 5 years, Passes an exam with a 40% pass rate, and needs to work under a licensed CPA for at least 1 year. They're licensed through state board of accountancy.

An Enrolled agent passes a tax focused exam and is licensed directly with the IRS.

There are a lot of "accreditation" out there- It's like when you go to college for an IT degree there are several certifications you can get along the way but they're not really industry standards.

CPA/EA/Attorney are the 3 that are an actual license to the best of my knowledge.

Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
Website View Page
2 Reply
Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
6y
Originally posted by @Terrell Garren:
I'm sorry if that seems bias; however, I spend well over 15k per year on courses and education to stay up to date and expand my knowledge. What we don't know can hurt you as a client. My goal was not to insult or bash. I was purely making a statement as to sometimes paying too little can be for a reason. You will find that rate to be EXTREMELY below market value and that is often a cause for concern. I know some great individuals who undercharge, but not by that much.
The "license" for an accredited tax advisor is not a certification in the field that anyone actually considers, nor is it licensed by any established jurisdiction. In the industry what is considered licensed is those who have representation rights before the IRS.
That designation does not give any representation rights, that said the education may not be bad; however, the credential does not carry any weight in the industry.
IRS Response on credentials:
https://www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications

Exam Contents:
https://higherlogicdownload.s3.amazonaws.com/NSACCT/7e1b22bb-4736-47f7-a45d-41ce8d27e073/UploadedImages/App_D_-_ACAT_ATP_classification_system_-_for_online.pdf

[email protected]224-381-2660
2 Reply
Derek Smith
Rental Property Investor · Waco, TX · Member since 2017 · 28 posts · 21 votes
6y
@Justine Scheuher.
Sounds high, like way too high.
We’ve only been paying 200-275 the last 5 years.
That included, W2 jobs, 1099, LLC with rentals, investments, etc.
I would definitely shop around for next year.
Good luck.
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