Astonished at my tax services bill!

[Mike Wells]

I have 6 rental properties, all Single Family Homes. I was previously paying a tax professional around $800 to $900 to prepare my tax returns for my 6 properties as well as my personal. I am using a new tax professional on the recommendation of another investor, who has since passed away- he recommended his daughter. I understand that pricing can vary from one tax professional to another, and I honestly expected $1,000 up to $1,600, but I had to scrape my Jaw off of the floor when I opened the email with my invoice to see that it was $3,000!

$3,000 for a personal return (filing single) and 6 properties (no LLC or Corp) does not seem reasonable. I only have experience with my previous tax professional as an investor, so I have nothing else to compare this to. I was with them from the time I had 1 up to all 6 properties. Is this consistent with what I should expect to pay for the returns I had performed? I had zero one-on-one time consulting or tax strategization, only submission of my tax criteria and completion of my returns. This is roughly $500 per door! If I had 100 doors, would I expect a $50,000 bill?

[Michael Plaks]

The amount of refund is a completely meaningless number. All it shows is how much you overpaid from your paychecks throughout the year. It tells you nothing about how efficient your taxes are.

Analogy: grocery store. What you get back as a change from the cashier does not tell you if your $5 purchase was a good price. Your "refund" depends solely on what bill you handed the cashier earlier. You give her $10 - your "refund" is $5. You give her $100 - you "refund" is $95, yay!!!  You give her $5 - you get nothing back, at all. While your $5 out of pocket cost remains exactly the same.