Are You Getting the Most Out of Your Tax Preparer?

December 30, 2015



This should be a busy time of year for most accountants and tax preparers with year-end wrap up and tax planning with clients. If you haven't heard from your tax preparer yet, maybe you are scratching your head right now at that last sentence. And maybe you need a new tax preparer! To explain: these last few weeks of December is the most valuable time to spend talking with your tax advisor about estimated tax payments (last one for 2015 is due Jan 15), last minute decisions on whether or not to make that big purchase you've been considering or scheduling that dental procedure, and your outlook for 2016.


Now, maybe some of you still prefer to file on your own or through a system such as TurboTax. While there's nothing wrong with that decision, it may mean that you are missing out on some valuable advice that you are not going to receive from a software program. Filing your taxes is only the mechanics- receving solid planning and advice before tax deadlines is what you gain from a tax advisor, which is something a software program often lacks. 



When you work with a tax advisor, you are paying for the knowledge and guidance of the preparer- so choose wisely and understand the value you are receiving.Here are some tips in that selection process:


  • Always ask what is in the “scope” of tax return preparation. This should be in the engagement letter.

    • For example, some chain preparers only offer basic tax prep. A good preparer will include tax planning strategies and sessions and estimated tax schedules to keep you penalty proof and maximize your savings.

  • Determine if they are charging by each Schedule, a flat fee or just giving you an estimate. Always ask if they giving you an estimate or a final price. Many of my clients have come to me for help after their last preparer quoted one price and then "surprised" them with a much higher one with little explanation. Again, this should be in an engagement letter. 

  • Learn about industry averages. It is incredibly hard to determine how much your return will cost until the preparer has looked over your prior year return and spoken with you about the current year situation to understand the complexity of your return. That is one reason why return preparation fees vary greatly, and vary by geographic region. However, here are some industry averages based on 2014 and 2015 studies:

    • In 2014 and 2015, taxpayers with a Schedule C paid on average $250 and up. If you have a spouse, dependents, investments, capital gains, or rental properties expect to pay higher fees.

    • S-Corporation return prep fees vary from $500 into the thousands, depending on complexity of a return.

    • Partnership returns can be deceivingly complex. These often start around $600 and up

Know that you can also help lower your fees by providing your tax preparer with "clean" records. That means no shoe boxes filled with receipts, but instead, copies of all pertinent documents, clean reports for your rental properties or totals you spent on your medical and dental care rather than a stack of bills for the preparer to dig through. If they provide you with an organizer, filling that out and attaching your backup documents will go a long way in reducing the time it takes to work on your return.


Of course, staying in touch with your preparer through the year about major changes to your situation is another important way to prevent surprises at tax time. For example, I only work with clients where we agree to talk at least quarterly so that we can optimize tax planning. 


Above all, the relationship between you and a tax advisor is a very personal one. Work with someone with whom you feel a genuine rapport and who is responsive to your questions and needs. 


Are you interested in making a change this year? Contact us at 919- 883- 4272 or









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