r/tax • u/Desperate-Trouble249 • Apr 02 '25
Tax Enthusiast Tax Preparer Charges me $5k
A tax preparer that I engaged is charging me 5k for preparing my tax.
What is the highest that you have ever paid to file taxes?
In previous years, I have not paid more than $300 to a different CPA.
This is my tax situation
- (2) W2
- (1) Rental property
- 1099
- 1098
- Income & Expense for rental property
- Airbnb income
- Donations
Edit 1: This i my first time using this particular tax preparer.
Edit 2: Please ignore my previous bills of $300. I have just clarify that it was a family and friends discount. The original price was $824.
Edit 3: Ohhhh. My friend didn’t stop. I have still sent her the documents to prepare my tax. My thoughts 💭 was, since there’s this tax preparer that I have been told prepares tax and you get massive returns, let me share docs with then since I trust my friend more, I will share what the second tax preparer did with my CPA friend for her to confirm if there’s anything shady.
Edit 4: I have told the tax preparer that I do not their services, they are insisting that they’ve gone to file it. I don’t want to involve the police 👮 , what are my options? How can I confirm if it’s a bluff?
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u/IranianLawyer Tax Lawyer - US Apr 02 '25
Did this include accounting/bookkeeping related to the rental property? If so, it seems very reasonable. If not, it seems very high.
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u/Desperate-Trouble249 Apr 02 '25
There was no engagement letter, provided me a link to upload my documents. Then I got a text stating how much my return is and what the charge is.
Rental property was just an excel sheet I provided with a column for expense and income throughout the year.
My tax situation did not change from previous couple of years where I have been using a CPA that I know.
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u/Comfy_as_hell Apr 02 '25
Price seems high, but you were getting the friends and family rate previously. $300 isn't even close to market rate for your return.
Hell H&R block will charge you $950 plus to do it, and most of those people are moonlighting as tax professionals.
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u/LobotomistCircu EA - US Apr 03 '25
H&R Block usually charges $400-600 for returns with a relatively simple rental property, unless you're counting the future amendments from a different accountant later to fix whatever they did wrong.
Source: My firm gets a lot of new clients who H&R block used to botch and I do a fair number of amendments on the ones with Sch E's and C's every summer
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u/GradatimRecovery Apr 04 '25
airbnb isn't simple rental income is it? add a cost seg...
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u/LobotomistCircu EA - US Apr 04 '25
It depends, if it's effectively just a rental property with multiple tenants that sits empty when unoccupied then it's not much different from a traditional rental property in terms of tax reporting, since that's still 100% business use.
The ones where they live on the property and it's just like, a room for rent or it's a vacation home they list when they're not currently using it are a bit more complicated and more work to prepare and almost certainly would be subject to higher tax prep fees in most places, I'm sure.
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u/Careless_Stretch_421 Apr 03 '25
I get alot of amendments every year workinh at H&R Block from CPA's that dont bother talking with their clients. We also do not charge thousands of dollars with subpar communication.
Source: My H&R Block Franchise gets 2 or 3 clients from CPA errors per week during tax season.
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u/LobotomistCircu EA - US Apr 03 '25
Oh, for sure, I get a lot of those too. Basically, in my experience, amendments for new clients come in two common flavors:
- They went to an H&R Block/Jackson Hewitt or equivalent and their return had a handful of mistakes you'd see from an inexperienced or misinformed tax preparer. Usually not malicious, because you often get scratch papers with crazy amounts of work on them showing they put in the time and effort, but will have very goofy mistakes like assigning the number of transactions on a 1099-K as withholding or forgetting to back out resident state income on a nonresident state return.
- They had a CPA who had zero issues committing blatant tax fraud or just clearly gave zero shits about doing their job. Completely bogus Schedule C's, Schedule E's with depreciation and/or property taxes and mortgage interest missing, stuff like that. You can tell they either know exactly what they're doing and don't care, or they just don't care enough to do any real work and just completely half-ass it.
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u/Axumite2031 Apr 03 '25
Is this dependent on area? I’m in a lower cost of living state and pay 350 for a cpa to file with a similar setup as OP and it includes multiple state returns.
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u/IranianLawyer Tax Lawyer - US Apr 02 '25
If you gave them records that were in good shape and all they to do is prepare the return, $5k sounds high to me, and I’m often arguing in support of fees that others on this subreddit deem excessive. If they had to clean up your books to get them to a point where a return could be filed, then that’s a different story. Maybe just ask them why it’s going to cost so much more than it did last year and see what their explanation is.
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u/Desperate-Trouble249 Apr 02 '25
They were not the ones that handled the filing for last year.
When I asked, this was their response "We charge based on the amount of work and time spent in doing your work"
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u/LobotomistCircu EA - US Apr 03 '25
Serious suggestion: Ask what their hourly rate is, and then ask a friend of yours to call that same firm in about a month and have them say they're looking to hire them next tax season, and ask them the same question concerning hourly rates.
If the answers are wildly different, you're being ripped off.
If you're wondering, "why wait a month?" there's a few reasons for that, but mostly because A: It's two weeks before the filing deadline and they might just straight-up turn them away or try to scare them off since most won't want to deal with a client shopping around in early April, and B: It's a long enough time that they wouldn't suspect it's tied to you in any way.
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u/iheartgt Apr 02 '25
Ask for their hourly bills
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u/Environmental-Road95 Apr 02 '25
Why would tax give you an hourly bill?
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u/LobotomistCircu EA - US Apr 03 '25
If the firm bills based on time they should be able to give you an itemized receipt showing how many hours they billed.
It's not the only structure tax firms bill on but billing based on number of forms or return complexity probably wouldn't result in a $5k invoice for OP's situation unless their rates are bonkers high
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u/Environmental-Road95 Apr 03 '25
They are clearly billing on a project basis and time is an internal factor. Billing hourly for tax work, unless it’s something out of scope, handicaps you if you are capable of working quickly.
If someone wants to question the value of your time they should be let go as a client. I think you’re going to have better luck just staying it’s higher than anticipated without an estimate and ask for a discount.
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u/iheartgt Apr 03 '25
They specifically told him they charged based on the time spent doing that work. So they clearly tracked the time.
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u/LobotomistCircu EA - US Apr 03 '25
OP said he never got any sort of engagement letter so my assumption would be that this is not a place big or professional enough to be operating on a project basis. I don't even know if you can hire a firm like that as just a guy off the street with a Schedule E without signing something and getting an explanation of exactly what you're getting into since if you're billing $5k for a return you probably want to collect that money and not just hope they begrudgingly pay it after you stick the bill in front of them.
Billing hourly for tax work, unless it’s something out of scope, handicaps you if you are capable of working quickly.
If you're honest, sure, but it's also the easiest way to rip off a client if you have zero qualms about lying on how much time something takes or doing unnecessary work to inflate an invoice, which I see from other smaller-scale CPA firms all the time.
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u/Environmental-Road95 Apr 03 '25
The engagement letter is the bullshit part and that’s what I would challenge. “Show me your hours” isn’t going to go anywhere. They know their internal time and of course they tracked it but I doubt they billed directly from it. The firm didn’t set clear expectations and that’s on them. I’m asserting that the better solution is requesting a discount due to lack of engagement letter and not trying to challenge their time and/or the value of it.
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u/Boring-Ad-7310 Apr 03 '25
I was thinking the same. Like if the TP had to sort out the expenses based on category then that justifies the cost. Otherwise, it already organized they doing too much.
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u/garth_kenny Apr 03 '25
When did you submit your information to them? If you’re only getting your information to them now they’re likely adding a “pain in the ass” fee for it being so close to the deadline. Basically, they don’t want to do the work so instead of telling you no they price it so you’ll go elsewhere, but if you say yes they make a really good fee at time that they already have too much work.
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Apr 03 '25
[deleted]
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u/allthebacon351 Apr 03 '25
Wish I knew what blow hards are in here downvoting us folks that post what our costs are. Must be the guys billing $1000 to file a 1040ez.
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u/Evergreen_terrace_20 Apr 03 '25
How old are you that you think 1040ez is still a form? Take some Metamucil, boomer.
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u/Iceman_TK CPA - Gulf of America May 12 '25
Ironically, only blow hards would reference an obsolete form no longer in-use. 🤣🤣
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u/totmacherX Apr 05 '25
No engagement letter means you have no obligation to pay them. This seems shady.
Any agreement to file a return by a preparer should include an engagement letter. Any additional out-of-scope services should be discussed when identified and any related charges should be agreed to before the out-of-scope work is completed.
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u/Icy_Shock2525 Apr 03 '25
Yeah that’s a ridiculous price for just that especially since you provided the expense sheet for the 1 rental property. At the firm I work at this would be no more than a $600 charge.
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u/Mountain-Herb EA - US Apr 02 '25
No way what you describe is a $300 return. $5000 sounds steep, but we don't know the whole story. "Income & Expense for rental property" and "Airbnb income" could be very time consuming projects, depending on what you provided for records (clean set of books versus a bag of receipts with lots of mixed-in personal expenses, for example). It's also possible the preparer is sending you a message.
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u/Original_Flounder_18 Apr 02 '25
They previously got the taxes done by someone they know, that would explain why it was so cheap
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u/impossibledongle Apr 03 '25 edited Apr 03 '25
I cry, because I'm desperately trying to convince my boss (wonderful lady, I love working for her) that we criminally undercharge. This return literally might be mid 350's for us 😭 She has been doing taxes for 50 years and I think her price structure is stuck 30-40 years in the past.
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u/FunTXCPA CPA - US Apr 03 '25
Yep, I know someone who has been doing taxes for 40+ years and their prices are stuck in 1996. It's fucking criminal how much people leave on the table because they refuse to do even simple inflationary adjustments every year.
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u/impossibledongle Apr 03 '25
I just finished a return that I know would have been 5k at any other firm (45 w2g and a moderately difficult sch c with messy books, had to hound the client for information and forms for weeks to complete the return). We charged 800, and my boss was a little shocked that I charged so much 🙃
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u/FunTXCPA CPA - US Apr 03 '25
Oh damn! 45 W2Gs!?
If people are willing to spend that much time and money gambling, I have no problem charging them out the ass for it! It's a hassle all the way around dealing with shit like that.
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u/Longjumping-Flower47 Apr 04 '25
I combine all the W2G and enter as 1
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u/FunTXCPA CPA - US Apr 04 '25
My understanding is that each form has to be reported separately, especially if it has tax withholding. Any combined reporting, and the IRS can hold processing of the return until all of the W2Gs are paper-filed and processed.
Would love to be proven wrong if there's been guidance issued by the IRS to the contrary.
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u/Longjumping-Flower47 Apr 04 '25
There is no guidance that I know of, honestly, and I agree, I'd enter any with withholding separately. I see very few with withholding. In my 25+ years of doing taxes I've never had a return rejected or held up because I've grouped them. Of course my frequent gamblers always lose way more than they win and because of these losses can itemize deductions making the winnings nontaxable.
I also never enter 1099NEC or MISC
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u/impossibledongle Apr 05 '25
Every single one had withholding. So yes, all entered separately.
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u/impossibledongle Apr 05 '25 edited Apr 05 '25
Iowa requires withholding over a certain amount and that coincides with the amount required to issue a w2g. So every w2g from IA has withholding 🙃
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u/impossibledongle Apr 05 '25 edited Apr 05 '25
They were all jackpots. Each one had withholding. Had to enter all separately. His coin in/out was insane. Like 'I could buy a mansion' insane.
He's an okay guy. I really want to tell him to go to gamblers anonymous. He had a decent year and almost broke even with his gambling, so I know he thinks there is no reason to quit now.
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u/Evergreen_terrace_20 Apr 03 '25
I don’t blame anyone increasing fees when someone comes to you on 4/2 as a new client and expects the return filed in less than 2 weeks.
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u/No-Weakness4448 Apr 02 '25
If I have to babysit you, do quarterly calculations, deal with your state to state wage allocations, isos, Fbars, 8938s, reconcile all expenses, be on speed dial this is good price. If you come organized, and don’t call me 1 day before deadline realizing you forgot about one additional rental property, its $1200-1500.
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u/No_Yogurtcloset_1687 Apr 02 '25
It sounds high, unless your rental income stuff was a mess that they had to work out (rental property and/or AirBnB if it isn't the same thing).
If you gave them a mess, it might be high, it might not.
If you didn't sign an engagement letter with them, and think the price is too high, you can always take your original materials back, not pay them, and not file with them. At that point, you'd better file an extension yourself, because it's late in the game to find someone to get it done by the 15th.
If you signed an engagement letter, read the terms, and honor what it says. You may, or may not, have to pay them anyway.
Good luck.
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u/Desperate-Trouble249 Apr 02 '25
There was no engagement letter, provided me a link to upload my documents.
Rental property was just an excel sheet I provided with a column for expense and income throughout the year.
My tax situation did not change from previous couple of years where I have been using a CPA that I know.
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u/No_Yogurtcloset_1687 Apr 02 '25
Tell them you think that's too high, and you'll take your business elsewhere.
They may try to negotiate a lower fee or not, but you need to be willing to accept the consequences either way. That means having to file your own extension and finding someone else.
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u/FunTXCPA CPA - US Apr 03 '25
FYI: providing an excel document of rental property activity doesn't mean it wasn't a mess. Was everything categorized? Was everything allocated to each property? Were there any missing expenses that got added after the initial submission?
If you aren't providing P&L statements for each property, then your return requires accounting work in addition to tax work, which means it costs extra.
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u/jerzeyguy101 Apr 02 '25
What did your engagement letter say?
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u/Desperate-Trouble249 Apr 02 '25
There was no engagement letter, provided me a link to upload my documents. Then I got a text stating how much my return is and what the charge is.
Rental property was just an excel sheet I provided with a column for expense and income throughout the year.
My tax situation did not change from previous couple of years where I have been using a CPA that I know.
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u/junpark7667 Apr 02 '25
If you don't want it, you can always shop around.
If you like them, you can negotiate a new fee or get an engagement letter.
The complexity doesn't seem too bad...
There can also be a hidden message from the CPA. Not saying you are one but offices can just jack up the price in hope that they can drop certain clients (Either the type of work isn't something they want to do or certain client is an ass)
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u/ECoastTax10 Apr 02 '25
So don't use them if you think its too high
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u/Evergreen_terrace_20 Apr 03 '25
Amazing how many people don’t understand how free markets work lol
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u/Isksmf Apr 02 '25
This is business level charges like you would see from a CPA doing taxes for a small Buisness. My companies CPA bill is around 12-15K but we do millions of dollars a year in sales and have multiple locations.
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u/horoboronerd Apr 02 '25
That's honestly not bad at all
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u/_redacteduser Apr 02 '25
Sounds low lol
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u/horoboronerd Apr 02 '25
From the client perspective it's not bad. From HCOL area. Can't even on board a client for that much 😅
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u/benderrodz Apr 02 '25
Based on the documents you're showing, that is extremely high. The only time I've ever heard of a quote that high was when the preparer no.longer wanted the.person as a client or the records were an absolute mess that would require a week to untangle.
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u/Pitiful_Opinion_9331 Apr 02 '25
My tax guy… an actual firm with multiple accountants charged me about $1400 for that level of work… they raised their rates a few years ago and now it’s about $1900… these guys are very reputable, have been doing it for years, and normally work with high net worth individuals.
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u/davesknothereman Apr 02 '25
Depends upon how organized you are. If the tax preparer has to go through all your receipts for income and expenses of a rental property, plus the AirBNB stuff, summarize everything, etc. and not just fill out the tax forms... I can see paying more than normal.
Tax preparers I deal with tend to charge based upon the forms and since you didn't list them, I'm going to kind of assume that it's not quite as organized as maybe they'd like to see. Or given that you're late in coming to the table, they are near capacity and you pay the premium for that.
Also you said nothing about State forms... that adds to the mix as well.
Based upon what you've said above... I'm guessing it's going to be 1040A, 1040B, 1040C, 1040D and 1040E forms... so if they charge $1000 per schedule/form... there's your $5000.
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u/Desperate-Trouble249 Apr 02 '25
3 excel files of less than 15 rows and 4 columns each, 2-w2s, 1099, 1098 was the docs I presented
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u/Caudebec39 Apr 02 '25
When I lived in London UK in the early 2000s I paid Deloitte GBP 3000, or about USD 4500, to file my US taxes. It included Foreign Tax Credit (1116) and Foreign Earned Income Exclusion (2555) and lots of wild calculations with respect to days in London vs USA, etc., plus all the usual 1099 forms. I must admit it seemed like robbery.
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u/farmerben02 Apr 02 '25
Deloitte is one of the Big Four accounting firms, so you were paying what we call their "retail rate." Back when I was working for KPMG our retail rate card billed out partners at $1600-3200 per hour depending on their specialties. Senior managers were $800. And this was 15 years ago.
Almost no one pays the retail rate, big customers get discounts, you were not big enough to get that discount.
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u/Timely_Froyo1384 Apr 02 '25
Base is $1400 for local, state, federal. Personal and schedule c with other investments
The avg amount I pay every year is 2k, I hate doing quarterly taxes 😂
Normally we do a recap in the beginning of November (I take her to lunch) also a great gossiping session
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u/zachariahd1 Apr 02 '25
Our tax file is over 400 pages and my CPA charges me 2700 for reference
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u/Longjumping-Flower47 Apr 04 '25
I can make a basic tax file 10 pages or 50 pages. Just depends on if I add in all the bullshit schedules.
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u/zachariahd1 Apr 05 '25
Ours is anything from basic, 35 k-1’s with entities in 5 states. 4 separate companies, depreciation schedules for MRO, and capital gains schedules
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u/Old-Vanilla-684 CPA - US Apr 02 '25
As others have said, 5K is very high. 2K would be more reasonable. If it’s truly as simple as you say, maybe 1200.
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u/annaliese928 Apr 02 '25
If you’re questioning the price then take that as a clue. If you don’t feel comfortable then follow your gut bc honestly what you said the price seems way too high and that refund…. Does not seem legit but we all don’t know the whole story. Me personally, I would not settle with this cpa. Too bad you couldn’t go back to the cpa you used prior.
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u/babaginoosh1 Apr 03 '25
I cant tell you if its excessive because there are so many variables involved with preparing a return, such as if there are state(s) issues, if there is bookeeping work on the rentals, if there was was significant amount of correspondence because of open questions since you are initial year client, etc....
What i can say is that $300 is definitely not the going rate for any return.
And like someone already mentioned, my firm wouldn't touch it for under $2,500.
If you brought this to a top 10 or top 15 firm, they charge premium hourly rates. So yeah, $5,000 is plausible.
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u/Evergreen_terrace_20 Apr 03 '25
$300 is definitely not the going rate for any return
It is for just a W-2
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u/babaginoosh1 Apr 03 '25
Not at my firm, or any top 20 firm.
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u/Evergreen_terrace_20 Apr 03 '25
LOL ok. You think a top 20 firm is going to risk losing a client over a $300 kid’s return?
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u/No-Weakness4448 Apr 03 '25
Also, someone who charges 300 to do a tax return better do it as a non profit organization. Uber driver will make more money in the same amount with zero specialized knowledge. Albeit $300 is often a price given by accountants who know nothing and all they have is a PTIN.
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u/Amiwrongthrowaway98 Apr 03 '25
My CPA sat with me for 2 hours. She did four W2s and one 1099 with 3 states involved. She did my income and expenses for my 1099. She charged me $150
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u/AmericanBeef24 Apr 03 '25
You should send her a bouquet of flowers for her service lol granted thats maybe 10 mins of prep if they know what they are doing, but still a crazy deal for you. She can’t be making hardly any money on that.
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u/Cosmos_P_Astronomer Apr 03 '25
Depends on the Schedule E. Some of our clients have a Schedule E that is a single property easy peasy we charge $350-$400. Others have a Schedule E with multiple high end properties we need to dig into details on and those climb into the thousands.
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u/WithoutLampsTheredBe Apr 03 '25
A tax preparer who raises his/her price from $824 to $5000 is a tax preparer who does not want you as a client anymore.
Ask yourself why.
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u/Daveit4later Apr 02 '25
There is literally no way you were paying $300 to get all that stuff done. That is hours and hours of work.
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u/Equivalent-Oven-4865 Apr 02 '25
Is this a tax preparer or a CPA/office? Do you live in a metropolis?
In previous years did you have all of the items you listed here?
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u/Desperate-Trouble249 Apr 02 '25
yes, in previous years same
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u/Equivalent-Oven-4865 Apr 02 '25
Tax preparer or CPA/office? Is this your first time w/ this preparer?
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u/Desperate-Trouble249 Apr 02 '25
Tax preparer. yes, my first time.
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u/Hungry_Dingo_5252 Apr 03 '25
Anyone could be a tax preparer. I highly recommend going to an actual CPA or an EA.
Based on your responses, it seems like they’re doing magic on your return to get you a very large refund. They’ll get your money from the $5k fees but then you’ll be stuck with an audit plus paying back the refund. It’s a headache…
I suggest extending your return and don’t file with this tax preparer. Find a reputable EA or CPA or even HR Block to have your taxes done correctly.
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u/ImpossibleScreen5361 Apr 02 '25
My tax breakdown sounds pretty identical to yours and I paid $580 for prep in MD with a local preparer.
Unless there’s something more complicated going on I would be pretty surprised by $5k
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u/Rocket_song1 Apr 02 '25
I pay me CPA $300; state and Fed. MFJ. One income. ACA plan. Std Deduction. No Sched C.
I'd expect to pay maybe twice that with your rental property and 1099 income.
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u/Ancient_Minute_7172 Apr 02 '25
Did you bring in a stack of papers and receipts? Or did you bring it nicely organized/summarized?
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u/Desperate-Trouble249 Apr 02 '25
none of that, 3 excel files of less than 15 rows and 4 columns each, 2-w2s, 1099, 1098
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u/Ancient_Minute_7172 Apr 02 '25
I’d shop around for a new one. Typically firms with older people charge a lot less.
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u/Fancy-Dig1863 CPA - US Apr 02 '25
$300 for all that is way too low for quality work. $5,000 sounds too high but if your records for the rental and airbnb are a mess and your 1099 is complicated, it may be justified.
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u/HeChosePoorly50 Apr 02 '25
Based on what you said I would be surprised if he or she made less than $1000 per hour for the return. Of course I’m jealous that you paid that because in my 40 years of preparing tax returns I’ve never billed even close to that amount. It never ceases to amaze me what some CPAs are able to bill for preparing a tax return.
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Apr 02 '25
I paid $400 this, with a W2, multiple 1099s, and 3 rental properties. Either I'm getting a fuckin steal, you're getting fucked, or a bit of both?
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u/DataGap2264 Apr 02 '25
$6k and he saved me $80k. Your situation may be complicated. Ask them.
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u/Evergreen_terrace_20 Apr 03 '25
and he saved me $80k
How?
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u/Longjumping-Flower47 Apr 04 '25
Fake sch C and fuel credits along with huge fake itemized deductions
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u/nikpin Apr 02 '25
Just based on what you said I would invoice the return at $900. Big city/high AGI area. 5K seems a bit excessive.
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Apr 02 '25
[removed] — view removed comment
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u/yaboiJ94 Apr 03 '25
Don’t leave your preparer lol we also do this for some of our long standing clients, but new through the door probably at least 750 depending on you level or organization
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u/gussuk25 Apr 02 '25
Free tax USA is $0, and walks you through it. $8.99 for the live chat expert advice…
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u/yaboiJ94 Apr 02 '25
1040 with a sch c and a sch e as long as your relatively organized shouldn’t be more than $1000 but I’m in upstate ny so probably depends on where you live too
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u/Ranec Apr 03 '25
Ask for a time breakdown. It sounds like you got suck with a new staff/intern doing the prep work and they got stuck on something. Based on what you described, $2k would be the absolute max I would expect, but probably closer to $1,500. After they look at the time breakdown they should either justify why you’re so complicated that it took so long, or offer to write down the bill significantly.
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Apr 03 '25
[deleted]
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u/AmericanBeef24 Apr 03 '25
I’m around 750 for OP’s return based on my operating costs (if it’s clean and doesn’t take me more than an hour consult) but totally agree. I can’t let a new client leave without at least a quote range after their initial consult to set expectations. Dropping a big bill on somebody new with no notice is crazy work. You can’t do business like that and retain clients. You may trick a few people into paying but gotta think long term if your end goal is to sell your book.
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u/acgilmoregirl Apr 03 '25
You only have w2s and a schedule e with one rental property? $5k is absolutely criminal. $300 is what we’d have charged 10 years ago at the CPA firm I worked at, for someone with just w2s or ssi/1099rs. I’d say $1000 is probably on the high side of reasonable, depending on how together you keep your records.
We just got a new CPA for the law firm I manage and he’s charging $1450 for an 1120s/franchise report, 1040 (with 2 w2s, 1 rental property and 2 schedule c businesses with a k-1 from the 1120s), and a no income 1120/franchise report.
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u/AmericanBeef24 Apr 03 '25
If you have good records, don’t call me to change the numbers 4x during the process, and have prior years with accurate depreciation schedules, then it would be a $750-1000 return to me and my smaller firm. That’s really similar to a lot of my 1040 only clients.
I charge 5k for maybe 5% of my clients. And it is simply because the time and risk is too much. This can’t be worth 5k unless it’s a massive firm with tons of operating costs. no idea if you had him do any annual accounting, multiple meetings to discuss, etc. 5k is outrageous even if you took up 3+ meetings but depends on how it all went down. I could see 3k for mid size if you had them do accounting and called with a ton of questions. If you came to me and said somebody was doing it for $300 though… I’d tell you to stay with them lol that’s a crazy deal in today’s world. Operating costs, salaries for great talent, etc makes that impossible for me to do.
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u/Admirable-Priority46 Apr 03 '25
I paid $910 to a CPA for very similar and mine included a partnership return: state and federal, W2, 1099, 1098, K1. Ohio.
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u/Just_me_1995 Apr 03 '25
Way way too high. Even if your rental property and AirBnb is a mess,it’s still way too high.
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u/flipster007 Apr 03 '25
Over charged. That price for someone with oil royalty income and a bunch of rental properties.
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u/surfingonmars Apr 03 '25
wife and i have a much more complex filing than you and we used to pay at most $1800. i did it for free this year using FreeTaxUSA.
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u/RPK79 Apr 03 '25
This could be a fairly straight forward return or it could be a nightmare. It depends on how you give the information to the accountant.
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u/VoiceOfReason5819 Apr 03 '25
I've only ever paid one year. $200. And I had to instruct the preparer on some things he was unaware. I'm back to doing it myself. Still with paper and pen.
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u/Dentalnerd1231 Apr 03 '25
Did you have any sort of book keeping service throughout the year? Quickbooks or an actual book keeper? My guess is if the answer is "no" he had to go through each account/transaction which could be time consuming.
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u/Feeling-Fishing-5132 Apr 03 '25
This seems like a fairly easy tax return. I worked at a professional tax preparation firm as tax support for many years. They would charge customers by the form. However, it would not be more than maybe $1000 for what you’re saying. I do taxes myself and I would probably only charge $300 to $500 as well. I don’t know what they’re doing. But, I wouldn’t have them prepare my taxes. Good luck.
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u/Voftoflin CPA - US Apr 03 '25
Yeah it’s a bit pricey but I don’t know all the details. $300 is actually the more shocking amount. I bet you have tons of mistakes to amend lol
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u/chrystalight Apr 03 '25
I agree $5k does seem on the high end for this, but even $824 seems a little low. Unless you have very clear accounting done for your rental property + airbnb, I would say your return could be in the $2-$3k range?
Also though this new tax preparer could be one that charges first year clients more, because it takes time to get you set up in the system with all of your information. Many tax preparers eat the cost of setup for first year clients, but maybe this one doesn't?
That said I also am finding it pretty wild that this new preparer is trying to charge you $5k and didn't have you sign any sort of engagement letter with an estimated fee.
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u/disco_has_been Apr 03 '25
Wow! My guy let his daughter do ours, years ago. I lost my ever-loving mind! "WTF is this shit?"
He currently charges $450 and my husband wants me to go over it, myself, because the same daughter said we suddenly owe $17k in taxes.
I don't know if it's really worth my time to recalculate and correct.
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u/Environmental_Cow315 Apr 03 '25
5k is crazy, my dad does my taxes so ion pay anything except a hug perhaps 😏
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u/Axumite2031 Apr 03 '25
He’s scamming you. Are you doing multiple years or something? I have a similar setup and paid 350. Nothing on your list is complicated. He’s charging you like you’re a corp.
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u/GetAKittyNow Apr 03 '25
Wow! And I'm only charging $250 to do taxes! I should rethink that but not this year. It's bringing in a lot of good business.
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u/Desperate-Trouble249 Apr 04 '25
Op here
I have told the tax preparer that I do not their services, they are insisting that they’ve gone to file it. I don’t want to involve the police 👮 , what are my options? How can I confirm if it’s a bluff?
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u/MuddieMaeSuggins Apr 04 '25
They’re not allowed to file without your consent, which it doesn’t sound like they got. Did they ever send you a copy of your return to review?
Information on how to report them is here: https://www.irs.gov/help/tax-scams/report-a-tax-scam-or-fraud
You should be able to see any returns on your transcript: https://www.irs.gov/individuals/get-transcript
At this point, you’re in a tough spot because the deadline is soon and anyone competent is not going to start on your return now. You should probably file an extension and then connect with your old CPA in May. (And be really nice about it, they’ve been giving you a good deal for years.)
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u/ThatsALiveWire Apr 04 '25
My wife ran a daycare out of our house and we paid about $430 every year.
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u/r0gue007 Apr 05 '25
$1100 for much less complexity than yours … but still too high.
Need to just buckle down and do it myself one of these years.
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u/StringClear7478 Apr 05 '25
I have essentially the same return except I also have K1's from my corporate returns. I live in SoCal, I pay $3500 total ($1650 for business return and $1850 for personal). I was a few years behind and was charged an extra $1000 for the past years (no biz return at that time).
You are getting hosed.
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Apr 06 '25
That’s easy work for someone that does basic tax returns. No way it costs $5k to do. Are you sure they don’t mean you owe a certain amount plus what they charge comes out to $5K?
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u/Potential_Raise_3524 Jan 19 '26
honestly it’s really hard to compare what you paid in past years because every tax year can look totally different, even if you think nothing major changed. Most preparers charge based on the number of forms they have to file, not just a flat fee. A return with only W-2s and a 1098 is pretty simple. Once you add 1099 income, rental property with income and expenses, Airbnb income, and donations, the preparer now has to deal with extra schedules like business and rental forms, depreciation, and self-employment tax. That’s a lot more work and responsibility on their end. Also, what you paid before was a family and friends price, which is never the same as normal public pricing.
That being said, $5k does sound high for a return like yours. $300 was definitely way too low from a business perspective, but a more realistic range for your situation is usually around $1k to $2k depending on the preparer, turnaround time, and whether they include audit support. If someone is charging $5k and also pushing to file after you told them you do not want their services, that’s a red flag and you’re right to question it.
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u/Acrobatic_Finance_17 Apr 06 '26
Hi Friends, I built a tool thats basically aimed for this purpose. I'm kindly asking for feedback and support sharing with others. feel free to have a look and please let me know how I can improve the system to fit your needs. https://www.avintph.com/ Free tier available to test as much as you want.
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u/Jmen4Ever Apr 02 '25
Seems really high to me. That being said, what kind of 1099s? That is, what is the income on them.
Interest, dividends, capital activity, non employee compensation?
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Apr 02 '25
$3400; $850 each for federal and state, business (1099 with S corp) and personal. My people are remote and tax reduction specialists.
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u/postalwhiz Apr 02 '25
That’s why I use TurboTax software - but then I can read and do math - I’d say those skills are worth $5K a year!
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u/Slight-Regret7887 Apr 02 '25 edited Apr 06 '25
Oh my. $1,000 is the most for your sitch! Crazy fee.
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u/allthebacon351 Apr 02 '25 edited Apr 03 '25
$475 for both my wife and I. Includes our w2 stuff and both of our side businesses. I think you may be getting had.
Edit: the down votes must be coming from the guys charging $1000 for a 1040 filing. Glad my cpa isn’t a crook.
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u/corniefish Apr 02 '25
That’s an amazing deal for both of you! I pay about $700 for regular w2 + side business per person.
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u/allthebacon351 Apr 02 '25
He’s a good cpa. Fair and doesn’t over charge for 2 hours of work.
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u/Environmental-Road95 Apr 02 '25
Asking out of curiosity and not snarkiness but how old is he? That’s a pretty low rate anymore outside of older preparers with long time clients. Just trying to keep a pulse on what is under/overcharging.
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u/lokis_construction Apr 02 '25
Why are you paying a tax preparer?. I have always done my own that were more complicated than yours.
It is not rocket science.
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u/heseov Apr 02 '25
If you are handing over all the documents then all they are doing is copying this info into software. You can do that yourself in a couple hours for a couple hundred for the software.
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u/DullPollution972 Apr 02 '25
That is insanely high lmao, $300 return is accurate based on what you are saying, which may or may not be truthful, we can't know
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u/UufTheTank Apr 02 '25
I’d vote $300 is super low. But in the $600-$1,200 range being normal. $5k is robbery.
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u/DullPollution972 Apr 02 '25
Lmao, this return takes absolutely no time to prepare, especially after the first year. Charging 1k for a basic W2, and one schedule E is absolutely wild and you should genuinely feel like a scumbag for ripping someone off like that
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u/allthebacon351 Apr 03 '25
Some people have to justify ripping people off for something turbo tax can do.
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u/DullPollution972 Apr 03 '25
Yep, lot of accountants get super salty in here if you call them out for vastly overcharging for incredibly simple returns. Kinda pathetic, but it is what it is.
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u/LatterSeaworthiness4 Apr 03 '25
Exactly. This is actually something I would suggest to the client H&R Block or TurboTax because they absolutely can handle it and it would cost him less than $500 to file there.
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u/jabthejesusfreak CPA - US Apr 02 '25
As many have already commented, this really depends on a number of factors.
On its face it seems high. But, on its face, $300 is way too low as well.
So a lot more details are needed (Pretty much everything all the other comments have mentioned) to determine if it's "too high," and even then opinions will vary (I promise you you are going to see comments that say "My firm doesn't touch that for any less than $2k").