What makes one return more work than another
Preparers price by the work a return needs, and the work follows the forms. A return with W-2 income, a few 1099s and no Massachusetts complications is quick to prepare. Each additional schedule adds its own records, calculations and questions.
- Self-employment income (Schedule C), especially without clean books
- Rental property (Schedule E), including depreciation for each property
- Sales of investments, cryptocurrency, a home or a business
- K-1s from partnerships, S corporations or trusts, which often arrive late
- More than one state: a move into or out of Massachusetts, or income taxed elsewhere
- The new federal deductions for tips, overtime, car loan interest and seniors, where the records need checking
- Prior-year problems: unfiled years, amended returns or open IRS or DOR letters
- Records that arrive incomplete or in several batches
Flat fees, per-form fees and hourly billing
Most individual returns are priced either as a flat fee for a defined scope or on a schedule that adds a charge for each form. Hourly billing is more common for cleanup work, such as reconstructing records or preparing several past years.
Whichever method a preparer uses, what protects you is knowing the scope in advance: which returns, which years, and what is not included. A written engagement letter that says so avoids the surprise invoice.
Fee arrangements to avoid
The IRS tells taxpayers to avoid preparers who base their fees on a percentage of the refund, or who offer to deposit all or part of the refund into their own accounts. It also warns against preparers who claim they can obtain larger refunds than others can.
A fee tied to the size of your refund gives the preparer a reason to make the refund larger. The refund should be whatever the law produces from your records, and the fee should not depend on it.
How to keep your own fee down
- 1.Send everything at once, using a checklist, rather than in batches.
- 2.Include last year's federal and Massachusetts returns if we did not prepare them.
- 3.Label any document you are unsure about rather than leaving it out.
- 4.For a business or rental, bring totals by category rather than a box of receipts.
- 5.Tell us early about anything unusual: a sale, a move, a letter from the IRS or DOR.
How pricing works with us
After a short conversation and a look at last year's returns, we tell you what we will prepare, what we need from you and what it will cost. You get a scope and a price in writing before anything starts. If something new turns up partway through, such as an unreported sale or a second state, we tell you before doing extra work.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
