Fees are calculated based on the amount of professional time spent. For consulting & many other tasks this will be simply the length of time spent (in quarter hour segments) times the hourly billing rate. For tax return preparation, a hybrid billing system is used, since this process requires a number of short periods of work done at various intervals, and it is therefore not practical to precisely track the time. This system consists of using base fees and then increasing them for various additional factors. Direct time billing will also be used for some tasks within the preparation process, particularly those that are more consulting in nature or are not straightforward.
Please note that by submitting your information to me to prepare your tax return and/or FBAR, you agree to my policies and procedures.
When is the Fee Due? The fee is due and payable at the time I have finished the final draft of the tax return and have sent the “Return Ready” email. Payment should be made within a week of receiving my email. If you decide to discontinue using my services before the tax return is completed, or if you elect not to use the completed return, fees for work performed will still be due.
Extensions: These will be prepared at no charge, unless an estimate of tax due is required.
The base fees for tax return preparation cover the usual time required to receive & send information, one to three exchanges regarding open items, preparation of the return, 15 minutes of review (forfeited if not used), and electronic filing, or instructions for paper filing. Because of efficiencies in my preparation procedures, basic returns do not take a lot of time, so, for example, the base fee for a U.S. resident return with one state only assumes an hour of professional time at $300 for the whole process. Fees for additional forms & other incremental charges will be added to the base fee.
If issues arise or consulting is needed, direct time billing comes into play which can sometimes increase the fee substantially. For example, open items can sometimes be very time consuming. While a few exchanges of moderate length are included in the base fee, more than that require billing for extra time.
Note: The fee for most tax returns will be higher than the base fees below.
U.S. Resident Returns:
U.S. Expatriate Returns:
U.S. Nonresident Returns:
U.S. Company & Entity Tax Returns (Forms 1120, 1120S, 1065, 1041)
Other Factors (most of these are billed according to time required)
Sometimes a tax return is more complex and more time consuming than a client is aware. For example, if you moved out of the state and had multiple income sources of income and expenses, I have to make numerous calculations to allocate your income correctly which can take a lot of time. If you have a question on the fee calculation, please let me know.
Tax Preparation Fee Includes:
NOT Included in the Tax Preparation Fee:
I hope the preceding information is sufficient that you won't need an upfront fee estimate, but if you really do need to have a more concrete idea of my fee before I start work on your return, please gather all of your tax information, fill out a questionnaire and then email or fax me your tax documents. In your email, please write in bold letters "NEED FEE ESTIMATE" and I will get back to you with an estimate before working on your tax return. Please be aware that this takes me extra time, so it may take several days or so to get back to you. If you ask for a fee estimate during the two weeks of April, I will likely have to file an extension for you and get back to you after the deadline has passed. Keep in mind that while I try to estimate your fee as closely as I can to what the final fee will be, sometimes I've missed something or incomplete information was provided, or other facts and circumstances arise while working on the actual tax return to cause an increase in the fee. I often discover this early on in the preparation process, and in such case, I will let you know if the fee estimate will increase. Occasionally the fee will less than the estimate, but only if the work involved was less than I had anticipated.
The following are billable at $300 per hour (minimum billing $75 for 15 minutes):
Issues with Fee or Results
After the tax return has been completed, I will send you a "return ready" email providing both my fee and the result of the tax return. If you have a question about the fee, please let me know and I will provide a calculation. It is important to note though that, regardless of any issues you may have, the fee is now payable.
If you have concerns about the results (refund or tax due), rest assured there will be ample time and opportunity to address and resolve them during the review process, which will take place immediately after you have paid the fee and I have sent you your tax return draft. Having your return in hand to refer to will make it possible for me to explain things more easily and you will be able to see more clearly what is going on in your tax situation. Always keep in mind that your return is never final until you have given your signature authorization on the e-file forms or the tax return itself, so changes can still be made if need be. You have hired me because of my tax expertise, so it is best to give me the benefit of the doubt and be aware that there is likely something that you don’t understand at play. In the unlikely event that there is an error on my part, I will correct it. The following are some specific situations that arise from time to time:
In almost all cases, the tax return is correct based on the information provided. The amount of refund or tax balance due reflects any overpayment or underpayment during the tax year and is often not consistent from year to year. Changes that could change your tax outcome from the prior year include tax law changes, an increase of income for which you did not have sufficient withholding, a higher tax bracket, change of job, multiple jobs, you got married and your spouse works, and you had additional income from dividends or capital gains, retirement distributions, etc. Alternative minimum tax can also greatly change an expected outcome. While I always look for every legal tax benefit you are entitled to, if you are still unhappy about the final result, you can choose not to use the tax return that I prepared for you. Be aware though that the fee for my services would still be due in this case.
It is important that you review the return carefully to make sure that there is nothing that you forgot to provide. The return is never final until it's been filed with your signature authorization. If you do not presently have the funds to pay your tax balance due, you have two options: (1) file your tax return and set up an installment plan, or (2) file your tax return but only make a partial payment or no payment at all, and let the IRS or state will bill you for the remaining balance. These options help you to avoid the failure to file penalty, which is a hefty 5% per month of the balance due if filed after the tax deadline (including extension), but the late payment penalty and interest would still apply. If you don't file, your tax bill could end up being much higher.
The accuracy of the tax return is much more important than having the lowest tax liability possible. Questionable deductions or tax positions can end up being a large burden later on if the IRS examines you because of them. Often irregularities are discovered by the IRS matching program. So, it is important to know why and how this different result was achieved. In any case, if you elect not to use the tax return that I prepared for whatever reason, payment of my fee is still due.