Wednesday, February 1, 2017

Average Tax Preparation Fees Hit $273 for 1040 and One State

FROM http://www.cpapracticeadvisor.com/

How much does your firm charge to prepare a 1040? How about other forms? What about the accounting and business advisory services you offer? When was the last time you checked to see if your prices were appropriate?

A new survey from the National Society of Accountants (NSA) shows detailed data about business practices, client fees, and spending for tax and accounting professionals. The 2016-17 NSA Income and Fees of Accountants and Tax Preparers in Public Practice Survey Report offers useful benchmarks for firms to use in billing, fee increases, engagement practices and other operations.

Business Mix and Revenue

Surveyed firms reported that on average 57.3% of gross income comes from tax-return preparation, 15.4% from write-up work, 8.9% from payroll services, 7.0% from tax services, 3.6% from QuickBooks/bookkeeping, 2.6% from financial statement presentation, and 5.2% from other services.

Firms split fairly evenly regarding billing methods for accounting services, with about a third billing by fixed fee (35.3%), hourly (31.2%) or a combination of the two (31.8%). Most bill for tax preparation by form (39.5%), hourly (8.4%), by a combination of fixed and hourly fees (25.0%) or by fixed fee only (23.2%).

Fees

The average fee charged to prepare an itemized Form 1040 with Schedule A and a state tax return is $273, and the cost for a Form 1040 without itemized deductions and a state return is $176.

Nearly half (49.8%) of tax and accounting practices increase tax preparation fees annually while 33.7% increase these fees every other year. For accounting fees, 37.4% increase fees annually, while 34.4% increase fees every other year.

Surveyed firms expected to increase their accounting service fees by an average of 6.1% in 2017, up from an actual increase of 5.3% in 2016.

Tax-preparation fees were expected to rise by higher percentages. Surveyed firms expected to increase tax-prep fees by an average of 6.4% in 2017, up from an actual increase of 6.0% in 2016.

Nearly three quarters (71%) charge an added fee for disorganized or incomplete files. Another 33% charge an additional fee for file extensions, 22% charge an additional fee for information received after a set deadline, and 24% charge an additional fee to expedite returns.

Average hourly fees for various client services include:

*             Offers in Compromise – $177

*             Estate/Financial Planning – $163

*             Audit of Financial Statements – $157

*             Financial Services – $144

*             Tax Services – $145

*             Management Advisory Services – $146

*             Elder Care Financial Services – $131

*             Financial Statement Presentation – $134

*             QuickBooks or Bookkeeping Advisory Services – $97

*             Write-up Work – $93

*             Payroll Services – $83



Average fees to prepare forms include:

*             $273 for a Form 1040 with a Schedule A and state return

*             $176 for a Form 1040 (non-itemized) and a state return

*             $184 for a Form 1040 Schedule C (business)

*             $124 for Schedule D (gains and losses)

*             $135 for Schedule E (rental)

*             $180 for Schedule F (farm)

*             $656 for a Form 1065 (partnership)

*             $826 for a Form 1120 (corporation)

*             $809 for a Form 1120S (s corporation)

*             $482 for a Form 1041 (fiduciary)

*             $733 for a Form 990 (tax exempt)

*             $69 for a Form 940 (federal unemployment)

*             $1,563 for a Form 706 (estates)

*             $413 for a Form 709 (gift tax)

*             $242 for a Form 8824 (like-kind exchanges)

*             $532 for a Form 5500 (pension/profit-sharing plans)

*             $282 for a Form 3115 (application for change in accounting method)

*             $59 for a Form 8962 (premium tax credit calculation)

*             $53 for a Form 8965 (health coverage exemptions)

*             $58 for a Form 1095‐A (health insurance marketplace statement)

*             $57 for a Shared Responsibility Payment Calculation