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Opinion On Tax Preparers Explanation Of Increase, Please

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Opinion On Tax Preparers Explanation Of Increase, Please

Old 04-10-2019, 06:54 PM
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Default Opinion On Tax Preparers Explanation Of Increase, Please

Tax preparation had a 75% increase from last year. Same preparing company, nothing much different in our status - 2 people with day jobs plus a small sole proprietor business. I asked for the reason of the increase and was told that the qualified business income deduction portion "...was a bear to get through" and that was the reason.

Can someone give me a general read on this cause? Is it possible this deduction is that involved?

Thanks!
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Old 04-11-2019, 03:52 AM
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It is a more involved computation/documentation. % increase doesn’t tell much though.
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Old 04-11-2019, 04:35 AM
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My accountant charges me 400.00 quarterly and 900.00 for filing year end. One of my good friends Dad told me to never keep the same accountant for more than three years . His experience was they stop working for you once they feel comfortable.
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Old 04-11-2019, 04:44 AM
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My guess would be that since the tax codes changed where people are better off to just take the standard deduction rather than itemize that accountants are seeing more people do their own taxes thus losing customers.
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Old 04-11-2019, 04:58 AM
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Originally Posted by urbnsr View Post
Tax preparation had a 75% increase from last year. Same preparing company, nothing much different in our status - 2 people with day jobs plus a small sole proprietor business. I asked for the reason of the increase and was told that the qualified business income deduction portion "...was a bear to get through" and that was the reason. Thanks!
75% increase is somewhat meaningless without actual numbers: if it went from $200 to $350, $200 might be cheaper than it should cost and thus $350 wouldn't be out of line because $175 is probably less than 1 hour of a CPA's time. If it went from $10,000 to $17,500, that would mean a significant increase in time spent.
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Old 04-11-2019, 05:09 AM
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Why wait 3 years if you don't trust your professional ..then do it sooner. If you trust your professional then why change ?

Tax professionals have a tremendous amount of constantly changing tax law changes to keep abreast of.

The new Section 199A (Qualified Business Income deduction) can be incredibly complex, particularly with multi business'.
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Old 04-11-2019, 05:59 AM
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Originally Posted by LI32 View Post
75% increase is somewhat meaningless without actual numbers: if it went from $200 to $350, $200 might be cheaper than it should cost and thus $350 wouldn't be out of line because $175 is probably less than 1 hour of a CPA's time. If it went from $10,000 to $17,500, that would mean a significant increase in time spent.
Exactly.
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Old 04-11-2019, 06:27 AM
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My CPA charged me the same as last year but no clue if that's germane to your situation.
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Old 04-11-2019, 06:28 AM
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Originally Posted by Sprockets View Post
Exactly.
I know you're a cpa, so is my Dad.

My Dad said it's taking him so much longer this year he hasn't been able to get all of his regular (long time) customers done - including yours truly.

In fact, he said bc of the changes this year he's retiring
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Old 04-11-2019, 06:36 AM
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Originally Posted by rbhankins001 View Post

In fact, he said bc of the changes this year he's retiring
The thought has crossed my mind!
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Old 04-11-2019, 06:39 AM
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Originally Posted by rbhankins001 View Post
I know you're a cpa, so is my Dad.

My Dad said it's taking him so much longer this year he hasn't been able to get all of his regular (long time) customers done - including yours truly.

In fact, he said bc of the changes this year he's retiring
I sold 90% of my tax practice years ago, and now only do about 22 returns total. No way I'd go back to the life I led in my earlier days.
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Old 04-11-2019, 08:56 AM
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I think claiming new complexities as an excuse to raise rates is a bit sleazy. I would think ongoing education in your chosen field should be considered part of the cost of doing business. That's how it works in most industries. That said, if you paid the additional 75%, then you just paid for their continuing education.
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Old 04-11-2019, 09:04 AM
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Originally Posted by bobeast View Post
I think claiming new complexities as an excuse to raise rates is a bit sleazy. I would think ongoing education in your chosen field should be considered part of the cost of doing business. That's how it works in most industries. That said, if you paid the additional 75%, then you just paid for their continuing education.
If it takes more time to complete an analysis client gets billed, period. Has nothing to do with learning the law. That part is built (or should be built) into the rates charged just like all other costs. That said, it is very common to charge clients for researching the treatment of various aspects of tax law.
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Old 04-11-2019, 11:22 AM
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Originally Posted by LongIslandFisherman View Post
Why wait 3 years if you don't trust your professional ..then do it sooner. If you trust your professional then why change ?

Tax professionals have a tremendous amount of constantly changing tax law changes to keep abreast of.

The new Section 199A (Qualified Business Income deduction) can be incredibly complex, particularly with multi business'.
199A isn't too bad for regular businesses. Rentals can be tricky. What really can be a pain is the 163j business interest expense limitation. Usually only applicable to businesses with over $25m in gross receipts....unless you allocate more than 35% of your losses to limited entrepreneurs.
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Old 04-11-2019, 01:56 PM
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Well, it is more like $200 going to $350, but...

More info is, I am my own accountant (or the software to run the business is). I am bringing in all the numbers for each G/L account plus W2s. I create a list each for the state tax use, the amount of materials purchased, cost of goods sold, each category of expense accounts (adv, legal, repairs, shop supplies, etc) relative to the Schedule C form, the beginning and end amount of inventory value. They are plugging in the numbers in the right places (I hope!). We initially sat with the receiving agent and handed her our numbers. In less than 30 minutes of her plugging in this info (we've been with them for multiple years), she had an estimated amount that we owe. She wanted to go over the numbers to be sure and I expected that. Her estimate was exactly the same as the amount we ended up owing. I'm guessing there wasn't too much to it, but that's only a guess.

To me, the actual amount isn't that important. If $200 was not enough last year, that's not my fault. Sharpen your own pencil. If it goes up 75%, I would like to know where that 75% applies. So, providing the actual numbers is still meaningless without knowing what each party is contributing to this service.
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Old 04-11-2019, 04:08 PM
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This statement is RIDICULOUS "I think claiming new complexities as an excuse to raise rates is a bit sleazy"

New Complexities … like changing the format of the 2 page Form 1040 ( been 2 pages for 30+ years) … to a "simple" 1 page Form …. and oh … 6 New Schedules never seen before early 2019. The Forms were available for tax preparers' to see until after 2018 ….

In quite a few cases .. how an item of income or loss is reported .. changes.. as just one example .....certain activities change based on the number of hours the person "spent" on that activity … not only total hours, but what job functions they did …some functions might not "count" as applicable hours for the tests ... and how they are reported can very easily change each year ……

So, yes, tax return preparation is much more labor intensive in many cases than in prior years.

The accountant should do more work and not get paid for the additional time ?

Wake up, dude.
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Old 04-11-2019, 04:10 PM
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Just picked up my stuff today. Last year it cost me $267 to have mine done and filed electronically, this year $285. After I pay the feds and my tax guy, I'll net around $1,300. Not complaining.
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Old 04-11-2019, 05:44 PM
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My accountant is the most stressed I’ve ever seen him in 10 yrs, Im also paying more this year than ever
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Old 04-11-2019, 07:34 PM
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Does not make sense to me but we charge about same every year as long as everything remains the same(naturally we have small increases due to overhead but that is it)

Now if somebody comes in with something WAY out of the ordinary I will charge accordingly but never 75% more, rather keep a long time client than make a few extra bucks one year

QBI can be very tricky, hell we are still learning but for most returns not that big of a deal. However we pay a small fortune for our software every year to take care of a lot of these calculations
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Old 04-12-2019, 03:18 AM
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Thanks for the responses. I don't know if they have software to take care of these calculations, but they didn't take over 30 minutes for the initial estimate. I suspect they had assistance.
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