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Quality market research is an important part of any pricing strategy, including tax preparation services. Before you can determine how much to charge for tax preparation, know what the local competition is charging. If the person down the street is charging $50 for a complicated tax return, you will not be able to charge $100.
The best way to check the competition is to pick up the phone and contact a sampling of the largest tax preparers in your area. Include both the large national chains and an assortment of local CPAs and tax preparation firms.
The Value of Your Experience
If you are planning to help others file their taxes, it is important to place an appropriate value on your training and experience. If you are a CPA with years of experience, that level of training and education should allow you to charge a higher price than what a simple tax preparer would charge. The CPA will naturally have a better handle on complicated IRS rules and regulations, and
that experience can pay for itself when the CPA finds additional deductions and tax credits that the tax preparer may have missed. As a consequence, a CPA may charge $100 or more to file a standard 1040A form, while a tax preparer with less training may charge less than $60. For more complicated forms, such as those filed by small businesss, CPA charges could be $200 or more, but the additional value the CPA brings to the table could make those charges worthwhile.
Going Above and Beyond
Many tax preparation services advertise a low up-front fee, only to tack on additional charges for things such as e-filing and tracking refunds. Tax preparers and CPA firms that can offer additional services at no cost may be able to charge a higher base fee and still provide a better value. It is important to look at all the fees your competitors are charging, including fees for electronic filing, refund-anticipation loans and more. This will give you a more complete picture of your local market and help you set your prices appropriately.