How Much Should I Charge as a Tax Preparer?

By Tim Frye

When it comes to tax preparation and the subsequent billing of your clients, it really is what you know that defines your price point.  There a multitude of varying methods as to how to bill your tax client.  Some tax preparers are charging by time, others charging by the form, and then there are some charging a flat fee.  There is no perfect way to bill a tax client.  Let’s take a look at the billing methods that are most effective then it comes to being a great tax preparer.

Should I Bill My Tax Client by the Hour?

There are many cases in which a tax preparer will regret charging set rates for short forms, one being the case in which your client wants to chat for an hour and cover all angles of their tax situation intensively.  In circumstances such as this it may be prudent to charge by the hour, however, it is often difficult to change your billing methods in mid preparation.  This cause much inconsistency and can be unsettling for the tax preparer.  If you are dealing with very complicated tax returns, charging by your time may be the best option.  

Should I Bill My Tax Clients by the Form?

Some tax preparers prefer to set a base rate on short and long forms, and then charge more for each additional form added that is relevant to that client’s personal tax situation.  This procedure also works well for the more intricate tax returns that require many different forms to be completed.  Once again though, this method can backfire if you are required to spend a lot of time with a short form client who wants to take up two hours of your time elaborating on their summer vacation to Nebraska.  In these cases you must try and play it by ear.  

Should I BIll My Tax Clients by Simple Flat Fees?

And then there is the good old simple way of charging a set concrete fee for both short forms and long forms.  This method is best for the beginning tax preparer who is looking to keep things basic and affordable for prospective new clients.  

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