Reasonable fee for income tax preparation in San Jose (rentals, insurance)

[Semiworker]

We are in the market to look for a new income tax preparer. The enrolled agent who has been doing our taxes sold the business to another person & we don't like the new location.

We are early filers, extremely organized and our numbers are straight forward. We do have rental properties & less than 10 stock trades per year. Our finances do not change much year over year.

We are recently quoted a supposedly "discounted" fee of $850. It comes with one 30 minute meeting each year.

Is this a reasonable fee for the bay area now?

[artillery77]

It's sounds ok for a smaller firm, high for a franchise tax place. Stock trades are easy. Preparing the books for your rentals on a tax basis is what you're paying for.

When choosing a tax preparer, you want to look at three qualities:
1. Communicate - The communication doesn't need to be much, but you have to be able to communicate together to understand goals and options.
2. Professionalism - Getting an agent is a step. Having a CPA is better. Have the discussion and understand what the changes are from year to year.
3. Longevity and Commitment - At the end of the day, taxes still have liability picked up by the taxpayer. Hiring a firm is someone that can help you through that. Places open 3 months a year can't help you. A reputable firm can also discuss tax strategy with you based upon your own situation.

[DMenscha]

If you are that organized, you could do your own with any of the larger tax preparation software.

[Semiworker]

Yes, we could do our own tax, but after toiling at work all year, we just prefer to have someone else handle that responsibility.

[SportyandMisty]

Originally Posted by Semiworker

Yes, we could do our own tax, but after toiling at work all year, we just prefer to have someone else handle that responsibility.

At what price would you say "that's too much; I'll bite the bullet and just use Turbotax myself."

[artillery77]

Originally Posted by SportyandMisty

At what price would you say "that's too much; I'll bite the bullet and just use Turbotax myself."

Think of it this way. TurboTax is great for some returns, especially if you are the textbook taxpayer. If you're doing 1040 EZ or 1040 regular with a few itemized deductions...it's great. Beyond that, and you're starting to push your luck. And make no mistake, that audit insurance is not a free pass. It's still the taxpayer's liability.

But for people with something to lose, and any amount of complexity, you go with a firm. A reputable firm is going to use something like Lacerte to prepare taxes, and they're going to pay through the teeth for each return. But, those returns will be done correctly. Your positions will be documented. Attached statements will flow and make sense and it can handle any situation you throw at it, and it the rare event that something flubs, you've got a professional there to get it resolved BEFORE the return goes to you, and if the IRS strikes anyway. You've got someone there to defend you in a last ditch effort. You've got someone to represent your position before the IRS beforehand.

Some people think they can just go to firms when there's a problem. If they pick you up, they will charge you through the nose. They defend their clients. Pick up too many scabs and the IRS might start thinking a firm is rotten. Plus individuals make obvious mistakes. the downside of the refund checks getting out so quickly is that people think they got away with things. The IRS will take it's time. Presently because of manpower issues, but they're in no hurry. Why get you right away when they can get you 6 years from now and assess massive interest and penalties to boot? Oh, and did you continue the wrong practice for the 5 years afterwards? (The I didn't know excuse is basically like saying...you got me btw)

Taxes will be the biggest expenditure for anyone making decent money. Not your college. Not your house. Not your kids. Not your car. The IRS will gladly let you DIY.

[eureka1]

In our small town, with a very simple return (I do have a rental property) and very few changes year to year I pay $175 to a good CPA firm.

[NextStage]

I'm in the East Bay, use an EA, have a few more forms and paid $510 for last year.

Check the CA Society of Enrolled Agents. They have an EA finder. Call around to a couple that are local and get their prices. You may get lucky like we did and find someone within 5 minutes of the house who practices out of their home. That person as been our EA for a few years now.

[xani]

I was ripped off by using Turbotax, resulted in non-small overpayment (yes, IRS agreed on overpayment)
Had to redo by hand, on paper, ASAP and sent correction forms in mail.
Would not deal either with Turbotax again or with "preparers". One can learn to do taxes easily, especially if one doesn't plan to cheat on taxes.
Turbotax does nasty bait-and-switch by the way, trying to get money out of you once you're in the middle of the return, this alone would be enough of a reason not to use it, for me.
$500 sounds like a fortune for doing a tax return.
If one has at least one previous year return that includes their rental/property and trades, it should be nothing to DIY.

[Semiworker]

Originally Posted by artillery77

Think of it this way. TurboTax is great for some returns, especially if you are the textbook taxpayer. If you're doing 1040 EZ or 1040 regular with a few itemized deductions...it's great. Beyond that, and you're starting to push your luck. And make no mistake, that audit insurance is not a free pass. It's still the taxpayer's liability.

But for people with something to lose, and any amount of complexity, you go with a firm. A reputable firm is going to use something like Lacerte to prepare taxes, and they're going to pay through the teeth for each return. But, those returns will be done correctly. Your positions will be documented. Attached statements will flow and make sense and it can handle any situation you throw at it, and it the rare event that something flubs, you've got a professional there to get it resolved BEFORE the return goes to you, and if the IRS strikes anyway. You've got someone there to defend you in a last ditch effort. You've got someone to represent your position before the IRS beforehand.

Some people think they can just go to firms when there's a problem. If they pick you up, they will charge you through the nose. They defend their clients. Pick up too many scabs and the IRS might start thinking a firm is rotten. Plus individuals make obvious mistakes. the downside of the refund checks getting out so quickly is that people think they got away with things. The IRS will take it's time. Presently because of manpower issues, but they're in no hurry. Why get you right away when they can get you 6 years from now and assess massive interest and penalties to boot? Oh, and did you continue the wrong practice for the 5 years afterwards? (The I didn't know excuse is basically like saying...you got me btw)

Taxes will be the biggest expenditure for anyone making decent money. Not your college. Not your house. Not your kids. Not your car. The IRS will gladly let you DIY.

I agree with your post.
This is why we try to find someone we can work with long term.
I try to have them describe the work process and I am surprised to find that some EAs want to maximize their tax season's earning by eliminating/minimizing face to face time. They just want you to drop off the documents and not even talk to you. Then they call you to pick up or just electronically send you the return. If there is nothing wrong, then they consider it done. I was told this is now the "young" customers' preferred way. I suppose we are considered old fashioned.
We will now reach out toward CPAs instead of EAs and have come to the conclusion that the running rate is about $600-$800 for our kind of return.