LLCs and S Corps, how much do you pay for tax prep?
Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
LLCs and S Corps, how much do you pay for tax prep?
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Linda WeygantPro Member
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votesI'm willing to guess that the bulk of your fee was not so much in tax prep (although it could have been), but was mostly "cleaning up my books".
Cleaning up the mistakes in a QuickBooks file can easily add several hundred dollars to your year end bill.
My fee structure is like this (and is similar to many CPAs in my area who are also self employed and work out of their homes. CPAs in swanky downtown offices charge more).
Most entity tax returns are about $300 IF you give me a clean set of books. This means the bank accounts reconcile, the escrow account reconciles, the credit card accounts reconcile, you have not co-mingled business and personal funds, the property tax and mortgage interest match what's on the 1098 and you've adequately captured repairs vs CAPEX.
If you are a bookkeeping client, I will have either prepared your books myself or checked over your work at quarterly intervals throughout the year at a rate of $25/hour so that in February, I already know your books are pristine and I can proceed with analysis, data entry, review and offering opinions for future tax savings (assuming we didn't do a tax forecast in the fall like we should have). If you are not a bookkeeping client and I have to unwind a bookkeeping mess during tax season, I can promise a few things.
1. Your fee will be a lot more than $300
2. You may go on extension depending on how bad the mess really is.
If your tax preparer offers it, take him or her up on a tax appointment in the fall. At this point, have them review your books and make corrections then (not during the crush of tax season). This is also a great time to enact things for tax savings during that year rather than playing the "If Only" game in the spring.
If your tax preparer doesn't offer tax planning sessions in the fall, find one that does. You may still end up paying the same amount, but you'll be getting some better services for your dollar than just fixing QuickBooks.
7 Replies
- Washington, DC · Member since 2012 · 57 posts · 34 votes10y
Hi Larry,
While it is smart to make sure you are getting the best value for the best price. I would caution you that soliciting prices from other BP members will not necessarily be indicative of whether or not you are paying too much, or too little, for related services. The prices charged by CPAs varies based on location, expertise and your individual tax/business circumstances. Other BP members may have less complicated individual tax circumstances causing their prices to be less, or more complicated circumstances causing them to pay more. The experience and expertise of the individual CPA can also cause prices to vary. While you may not be using all of the knowledge that you are paying for today. It is nice to know that when your circumstances change, your CPA will be expert enough to realize the change and know the best way to handle it (think of it as insurance). And then obviously, the more complicated your situation, the more you are likely to pay. So any responses you receive here will never be a true apples-to-apples comparison.
I will admit, this advice is a little self-serving since I am a CPA myself. But I would recommend reaching out to different CPAs and business owner's in your specific market and seeing the range of prices that way. Asking on BP and finding out that someone in rural Arkansas is paying less than you in NY, is not going to be surprising.
The one other thing I will mention is that in today's day and age, with all the varied communication tools at our disposal, you are no longer limited to having a CPA in your direct market.
Regards,
- 10yLogan AllecBusiness MemberAccountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
@Larry Turowski, for many CPAs, the fee for a business is directly proportionate to how much activity is going on in the business. An S corp that does 20 flips a year is going to be more work (and hence higher fees) than an S corp that only does a few.
Clarita CPA Group516 Reviews - 10yLinda WeygantPro MemberInvestor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
I'm willing to guess that the bulk of your fee was not so much in tax prep (although it could have been), but was mostly "cleaning up my books".
Cleaning up the mistakes in a QuickBooks file can easily add several hundred dollars to your year end bill.
My fee structure is like this (and is similar to many CPAs in my area who are also self employed and work out of their homes. CPAs in swanky downtown offices charge more).
Most entity tax returns are about $300 IF you give me a clean set of books. This means the bank accounts reconcile, the escrow account reconciles, the credit card accounts reconcile, you have not co-mingled business and personal funds, the property tax and mortgage interest match what's on the 1098 and you've adequately captured repairs vs CAPEX.
If you are a bookkeeping client, I will have either prepared your books myself or checked over your work at quarterly intervals throughout the year at a rate of $25/hour so that in February, I already know your books are pristine and I can proceed with analysis, data entry, review and offering opinions for future tax savings (assuming we didn't do a tax forecast in the fall like we should have). If you are not a bookkeeping client and I have to unwind a bookkeeping mess during tax season, I can promise a few things.
1. Your fee will be a lot more than $300
2. You may go on extension depending on how bad the mess really is.
If your tax preparer offers it, take him or her up on a tax appointment in the fall. At this point, have them review your books and make corrections then (not during the crush of tax season). This is also a great time to enact things for tax savings during that year rather than playing the "If Only" game in the spring.
If your tax preparer doesn't offer tax planning sessions in the fall, find one that does. You may still end up paying the same amount, but you'll be getting some better services for your dollar than just fixing QuickBooks.
- 10ySteven Hamilton IIPro MemberAccountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
I don't list my fees publicly; however, I can say that here is an article which was mirrored on the Wall Street Journal.
http://www.accountingweb.com/tax/irs/tax-return-pr...
http://www.cpapracticeadvisor.com/news/12065684/av...
I highly recommend a good read of those. - 10yGita FaustBusiness MemberAccountant · Richboro - Philadelphia, PA · Member since 2008 · 901 posts · 246 votes
That is why it is very important to invest in education. Learn the right way:
- get your books setup right
- get your processes
- write down your procedures
- create your own workflow
- check - double check - triple check those reports every day, week, month, quarter and yearly before you see your accountant for taxes, get a loan or private investors.
We offer a lifetime of education - cannot find elsewhere.
Wish you all the best.Remember it is not about money - it is the value you receive.
- Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes10y
I have an LLC and pay $450 a year to have taxes handled, but if I am sloppy in how I handle the books then I will pay more to have them cleaned up.
As side note, we investors often do a poor job in keeping our books because we see them only as the way in which we take care of our tax burden. That is only the smallest reason to keep good books. The true value is our ability to gather data over long periods of time and with that data to maximize the profit of future decisions.
Good data is fundamental to exceptional execution.
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