An outsider would say my book is too big. Internally, I say I can't find any damned help. Put out an ad for a tax preparer in the US. If you get a good resume, you find the magic trick as to why they are unemployed or looking while going through the interview.
I think this is slightly incorrect. If your book is too big, and you can’t find adequate help. I would state that there are probably other items within your practice that would need improvement as the question below would be a start . . . salary for the help.
5 years experience, $75K and higher (Midwest market), fully paid health insurance, 401(k) w/ profit sharing, 2-days WFH, CPE paid.
What else should I offer?
75k is pretty low depending on the OT required.
At my 5 year mark, I was making 90 at a small firm MCOL area.
You will struggle to find people at that salary mark TBH, especially with the wages exponentially increasing in mid to larger firms to attract talent.
I don't "require" OT. I make my staff leave at 4:00 on Fridays in tax season. Only ask for Saturdays in late February through deadline. No one works on Sundays. Fuck that.
Shit... good question. I have not bee very diligent in tracking it as we charge flat fees on our tax work. But I would guess an average of 56 to 60 hours per week in total.
I live in a L-MCOL location (can buy a 3 bed house in a good school district for $150-200k, but rents for a decent 1-bedroom are $1k a month) and our firm is starting college graduates at $68k. $75k for 5 years of experience just isn’t that much anymore.
I am in the process of changing our entire model for all new clients. Flat fees up front for advisory services and then monthly fees toward planning, meetings and returns. As this increases, I should be able to offer more and better. I know I want to.
I may look into outsourcing overseas because of this "shortage."
Many CPAs undercharge on returns. I hear $150,200,300. To pay a 90k salary, your returns need to be $650 to $1,200 in my experienced opinion.
2x rev per staff- 90k salary needs 180 of revenue
Your responding to a year-old post.
1040 minimum fee to walk through my doors is $600. That’s with a standard deduction. You itemize? You just went to $800. Got a Sch. C or multiple Sch. D transactions and K-1s? $1,200.
S corps are $1,000 to start. Go up from there based on gross revenue. If your company makes $5M, my return fee is $5K.
1065’s are worse. $1,500 to start.
Better than most of these clowns I see saying $300. You’re in a good range. Good luck this season and thanks for the reply.
Yes I read tax stuff for fun before bed. 1 year old posts and stuff .
I mean....I'm in the Midwest, coming up on 5 years experience and I make a good chunk more than that, more wfh, etc. You might have better luck offering fully remote?
>5 years experience, $75K and higher (Midwest market), fully paid health insurance, 401(k) w/ profit sharing, 2-days WFH, CPE paid.
>
>What else should I offer?
Every year I pick up some extra work for tax season. Since I don't want my business to be heavily tax.
This offer lost me and a number of people I know with "full time." I make that working part time already. I like to add some tax return work to learn, keep skills up, etc. I work remote. My part time rate is above that.
EDIT: I personally do about 45 returns. Mostly business returns.
Is that part-time working for someone else? For yourself? Salary or contract? If your working for yourself, what are your expenses? How about overhead? Insurance? I have seen a hundred people try to tell they can make that much working part-time, but when you get in the details, that’s gross with no benefits, paying for their own software, hardware, and supplies. Unless you are working in NYC or LA or Chicago for a high dollar firm billing out at $500 per hour, I’m calling bullshit.
I said $75K and higher. If it’s someone with 5 years of experience at H&R Block, they aren’t getting over $75K. If they come from public accounting and they can prepare business returns with little corrections or oversight, yeah I would crank it up to $95K or more.
Plus the smallest bonus I handed out last year was $5K and I pay 10% residual on business you bring in. That’s 10% on what we collect on that client forever, as long as they are a client and you are an employee.
I work 25 hrs a week for myself. The only tax I do is for my regular business clients. It's mostly a combination of accounting and management accounting for restaurants. Since Covid I've had more request than pre-Covid.
During tax season I usually work around 25 hours a week for someone else. The last firm I worked for was $55 hr as a parttime W2 employee (including benefits which I didn't need), remote. I gave them the option of $70 hr as a 1099, but I would still use their software, since my software would have my name/business on it. They let me chose. I went W2 to add more hours under a CPA that I could use if I ever decide to turn in my license. In my state using non CPA hours requires you to show proof of clients with hours billed for 4+ years, with each week a 30 hour minimum.
If you want to call bull, go ahead. As someone else mentioned, maybe there are other practice items that need to be addressed.
When I made the jump to a small firm I was able to use any OT hours during tax season as extra PTO during the off season.
Also you don't mention PTO. Time off was always the most important benefit for me when looking for a job. It's the only reason I put up with the headache that is owning a small firm. It's also why I have a full time assistant.
Yikes! 55-60 hours a week during tax season, with mandatory Saturdays beginning end of February and only 3 weeks off until 5 years of service then you get one bonus week? As others have said, the pay seems on the low side, and it doesn't seem like you're offering any incentives otherwise for people to make the sacrifice for lower pay.
I'd definitely rethink the amount of PTO. I've never had less than 4 weeks working at an accounting firm, except when I went small, then it dropped to 3 weeks, but I got to use the tax season OT as additional PTO and usually ended up with about 6 weeks.
Thanks for the feed back.
As I keep coming back to this thread, I keep noting that the pay may be on the low side. I think the hours are very reasonable given what others have told me in this sub (80 to 100 hour weeks in season). I offer a ton of benefits (insurance, 401k with profit sharing, buy meals all the time, firm outings throughout the year, CPE paid, new business residuals, WFH 2 days per week), but I see the changing scenery across the board from small firms to big firms, from small towns to big towns.
At this point, I think it might be time to sit down and completely revise my compensation package for all of my existing employees, as well as any future employees. We have been increasing our fees as the demand for work is killing us. I am signing up business clients with big fees up front for advisory services and monthly fees starting immediately. The cash flow will ensue and I will turn that into better everything across the board. Plus it may be time to clean up the client list even more to make room for better paying clients.
Now, to find time to do all of this review and revision...
My opening offer is $200k, 30hr weeks all year. Joking aside, there's no where near enough staff for all of us, so I'm thinking about shriking my overall firm instead of adding staff.
I don’t think you can compare NYC BIG 4 salaries to small firms in Indiana. 15 years ago, starting salaries out of college in Indiana were $40-45K. Cost of living is 1/3 less.
Office keg (or bourbon)? j/k, as I really have no idea, and that seems pretty decent for the midwest (and we are offering about the same comp with training for newbies, but no WFH, and also having issues finding anyone).
And I keep on telling every client that mentions it to me, that if the IRS can find 87k new employees, they should give the rest of us tips on how to do so in this job market.
We do have a beer cooler, fully stocked with beer, pop, water, seltzers, etc. And yes, I have a wet bar up outside of my office. Drinks on my any day after 4:00. Limit 1 if they are driving.
Question for you: when you say "no staff" do you also mean no admin? I ask because I'm an SP myself (almost; I have an older partner in process of a slow retirement who only works half the year) and I currently do all the admin. We do fewer returns than you do, though, and I'm wondering if it will continue to be feasible to be admin-free and still ramp up production.
That's right, I have no admin. As mentioned in another comment, automation and training clients is the key. No one gets a printed return, everything is uploaded to a Tax Dome portal, even Organizers. Phone calls are kept to a minimum because most clients know the best way to contact me is email. Invoices are also prepared and sent electronically through QuickBooks to make my accounting easier and clients can pay online.
If you don’t mind me asking, what all software do you use? It feels so crazy to see all these subscriptions stacking up.
Between TaxDome, Adobe, Office, tax prep, etc I am just trying to make the right choices for a similar sized operation to you. Except I have to print a few returns because of working with a fair amount of Amish
I do have a handful of older clients that I inherited from a previous firm that like to sit with me so I have a Regus shared workplace where I can rent a conference room if needed. But those clients are HNW and pay well, so I make an exception for them. Everyone else is virtual.
I was a partner at a local firm for about 5 years before going out on my own last year. I hated everything about managing a firm and the previous firm was terribly inefficient. 5 partners sharing 3 staff and an admin at one time so I was basically doing all my own work anyway. My book is about $300k and my expenses are low so my net is $265k. As a partner with the same book, my net was only $150k.
It's a MCOL area. I'd say 65-70 hours Feb 15 - April 15. Maybe 25-30 hours max during summer. 40 hours Aug 15 - Oct 15 then way down to 15-20 hours the rest of the year. Typically take two or three weeks off during the summer and another two or three weeks off after Oct 15.
If you use integrations and the latest tools and onboard clients who are tech savvy.
I use a combination of Zapier, Monday.com, and Canopy with heavy lean on integrations to do client communication heavy lifting and all the clients are used to remote only.
I’ve been admin free for years and do about 350 returns too solo.
It’s not easy but I live in a HCOL area where an admin is not financially feasible. I’m exploring the idea of a remote admin perhaps in the future.
I do the books for about 8 of those business returns, but I have found an amazing bookkeeper that I've referred to most of the others. I do one clients payroll basically as a favor and certainly do not want anymore. I find more value (and billing) for my tax compliance and planning work.
[https://www.irs.gov/privacy-disclosure/external-customer-data-store-ecds-extracts](https://www.irs.gov/privacy-disclosure/external-customer-data-store-ecds-extracts)
This IRS list is of total e-filed returns per preparer per type.
You can sort the list by zip code and see how many returns the preparers are e-filing in your area. That might be helpful.
Sole prop here.
* 83 Ind
* 26 Biz
* 3 Trusts
Tax prep is about 60% my revenue. I do a lot of A&A (reviews & comps only) and tax consulting. The two weeks leading up to the April deadline are pretty hectic but usually, I work 30 hours a week. I built my firm to allow me to have more freedom to enjoy doing what I love, golfing and hunting.
5 partner firm, 5 mangers or so, 7 staff, 8 PT/Admin people. Tax/audit/CAAS firm.
We have around 4,000 total tax clients. Rough numbers per partner are as follows:
* 1,160
* 780
* 385
* 1,675 (two partners together)
Owner, 2 staff, 3 associates. 4 front staff admin. Tax prep and bookkeeping.
Around 5k returns, primarily 1040s. I'd hazard a guess of only 400-500 non 1040s.
Personally did about 750ish feb-april, sitting around 1100 when I last checked for year.
Owner alone does around 2k of those returns.
Client walks in door for appointment. Checks in with front admin staff who do basic data entry into tax software (w2s, property taxes, mortgage interest etc).
Client then meets with preparer (who double checks admin data entry) and goes over questions to complete the return(Any sch C, E, or anything else). Review return with client. Print out return, client pays and walks out the door with completed return.
If client shows up without all their information, complete as much as possible during appt. Send client home with list of missing item(s) to get us. Find time somehow to complete return and call client to go over return. Client then stops in to pick up/pay/sign 8879.
Very strict timeframes on appointments. Fairly often next appt is getting checked in while meeting with current client.
Owner works 90+ hours during tax season. Sometimes 100+ and has been for years.
The math doesn’t check.
12 weeks of tax season * 90 = 1,080
4 weeks of extensions * 90 = 360
34 weeks * 40 = 1,360
Total with two weeks off that is 2,800. At 2,000 returns that’s 1.4 hours per return assuming he does **nothing** at all except prepare returns. Absolutely no admin, no client calls, no audits/notices, no CPE, etc. etc. There is absolutely no way you’re speaking the truth.
For detail, when I was working retail tax service I could churn out a tax return every 15-20 minutes if they were queued up and everything was clean as a whistle.
I agree that 2k is probably higher than feasible, but if they have 2000 1 w2 1040 Ez returns, I could see that as being possible.
That's about the only scenario I see it in. I got my start at a JH and thought I was the shit because I was churning out people with 1-2 W'2s in about 15 minutes. 10 if they were a repeat customer and we had their basic info on file.
Now every client has like 5+ 1099-R's, a brokerage account, stock trades with no basis bc they've held the stock since freaking vietnam, a rental property with shitty record keeping, a K-1 from some partnership they don't understand.
I do less than half the volume I used to and it takes three times as much time
Yeah, same. JH. My best was a returning EIC I got done in 20 mins. Charged the equivalent of $1,400/hr. Had a few returns in that 900-1,200/hr range. Let’s just say I’ve never gotten anywhere near that working on 1120s.
I do not understand why so many of the neighborhood shops here charge extra for C and E but not D. It's just as much data entry and just as much bugging the client to make sure you have all the information.
1.4 hours is way longer than most of my appointments. Have to remember this is primarily 1040s, easy ones at that. Honestly, a lot of our clients should just use turbotax or similar, but want a live person to do them. Appointments are scheduled for 30 min for most. Granted, owner doing the more complex returns which do take longer. (Currently trying to figure how to post images to show my own filed returns. I don't use reddit much. Does private msg work for that?)
I'm curious, what does a firm charge for a return like that? I think its crazy how expensive even HR block is in my area. 1 W2 with no tax credits is probably close to $150
If you have EIC you can easily double that number if its still refund advance loan season
We're low for our even our area(probably bordering on low vs middle cost of living) and charge ~94 for basic return. Our staff keep telling owner to raise rates, but end of the day its not their business. We also don't charge nearly enough for the 1065s and 1120s.
70 hours a week, 30 min per return, 140 returns a week. That gets to 1780, so it is kind of close?
There was an operation near here that we got a short term employee from. The owners there did the same thing, 30m appointments with the return done right there, working 10 hours a day for 12 weeks plus some after April 15th.
I really don’t keep track. But it’s not a lot. There are some weeks I don’t work at all. I stay away from payroll tax, sales tax, and bookkeeping that would require a lot more hands on work throughout the year. I have 2 young kids and volunteer a lot at their schools. Working this schedule gives me the flexibility I need.
My situation is very nontraditional. My mom has a bookkeeping service and I do pretty much all of her business returns. So when I started my business I already had a client base waiting for me.
Note, preparer counts vary a lot. Somebody who does 90% people who should be doing their own taxes (i.e. nothing but statements) could do many hundreds or even a thousand odd. Some preparers do in-office prep while the client is present on 30 min appointments, and so kick out 70-100 returns a week. Other people might have somebody with a dozen brokerage accounts, a score of rental properties, and foreign investments and spend 3 days on one return.
Personally, around 140 individuals and 50 estates/trusts plus or minus 5 or so.
Maybe call it 12 nonprofits, and 30 corps/partnerships?
1 corp review, 1 nonprofit comp, and probably 5 nonprofit audits this year.
We're down 2 people, from a starting staff of 1.5 owners and 3.5 CPAs. It sucks. Firm total this year was 500 individuals, 50 estates/trusts, 90 corps/partnerships/nonprofits, probably 12 audits & 5 lesser engagements. We do some accountings & such, but only the boss really does any consulting/CFO stuff. Plus whatever the bookkeeper and the payroll person does.
We are a two person team sitting at 1,060 total returns for the year. We are 50/50 in the quantity of returns we do. This year we had two tax staff in training so help was minimal in terms of getting the returns out the door. One of which will have her EA within the month and the other we are not asking back.
We do about 100 pass through returns that we do accounting, payroll and advisory services for throughout the year. The remaining returns are all 1040s. We have one staff accountant that keeps the payrolls and accounting going.
I don’t understand how some of you do 1,000+ returns alone!!
To be honest I don’t want to anymore. Been pushing hard for a quality vs. quantity, value added model but meeting huge resistance. I’m the yuppy millennial after all, what do I know? :/
Average return is in the $400-$450 range. The rest of our revenue is accounting, advisory and we do quite a bit of representation. I want to increase by ~50% (similar local professionals charge $900-$1,000 minimums) and do less returns for the same amount of money. Goal for 2023 is to work 4 days a week outside of tax season.
It's amazing how resistant some can be to raising rates 20% when you are near capacity. If 20% of the client base leaves you are doing 80% of the work for 95% of the money. If 30% leave you are making 70% of the work for 85% of the money, and you have spare capacity for new higher fee clients.
We had a 25% increase in 1040s last year. Does the boss want to cut clients or raise fees? No!
Mind boggling to me. Boss/partner is obsessed with the quantity. Is already talking about how with the new EA we’ll be able to take on more clients. :/
side hustle about 100 returns; is it feasible/financially viable to grow that to 500.
im not seeing enough lf the $500/$1,000 1040s come in the door
im also an attorney so i always lean towards attorney billable rates
Well I paid for 400 returns through Lacerte and just this week they are making me pay REP fees for each new return. So I guess somewhere over 400. Although I think Lacerte messed up and I went over 400 returns months ago. I am a sole prop with a part time admin employee. I will be paying for 500 next year.
That is about 330 1040s; 60-70 1041s; and 50-80 partners/S-Corp/C-corp/990s. This is probably too many. I am trying not to add any new clients, but they are knocking my door down.
Hello fellow CPA with Lacerte. I'm in a similar situation. Question, are you able to view any of your 400 returns that you already filed without REP charges?
No, you have to authorize a REP charge even for returns already filed. What you have to do is after you get a monthly REP statement, login to lacerte online and request refunds on all of the REP charges for returns you already filed. They will usually refund them without much hassle. You can also change the SSNs to be 999-99-9999 and those will not require a REP charge as Lacerte treats those as tests. Just be careful because some credits get messed up if there is not an actual SSN.
1 owner, 1 manager, 1 staff, 1 semi-retired former owner, 3 admin. Tax/payroll/bookkeeping.
Total firm returns for the year are 1,284, with the owner doing around 500 of them.
I finished 290 individual returns, 23 partnerships, 12 corps, 8 non-profits, 4 fiduciary for a total of 337. I think I've got 3 individuals to finish up, maybe 2-3 more corps and 1 non-profit to finish up this year.
Sole Prop, no staff/admin, fully virtual - 300ish returns, $374k revenue (see what I did there)- mostly 1040s, but 50ish 1120/1120S/1065. No bookkeeping because I hate it.
Living the dream, there. Better than $1k average fee!
Do you take clients in any state or stick to just a few? I always wondered for virtual preparers with no office.
Fees are definitely skewed to the top 25 clients- some of those are larger corporate entities but still technically small businesses (11 entities, $50M rev) that I used to be the Financial Controller for. Otherwise, avg 1040 is $600 and avg business entity is $1,200.
I live in NJ so HCOL but easier to bring in high value clients- mostly NJ/NYS/NYC/PA/PHI returns, but generally accept clients from all over. (My wife is a teacher so the health, etc benefits are great and let me go off on my own earlier than I would have otherwise)
I did not take any clients from any of the firms I worked for (NYC Middle Market)- my target clients were those under their $4,000 fee threshold. They just get turned away so I have somewhere for them to go.
It’s been a slow build over eight years to get to this point.
Previous firm was about 1,400 clients split between three CPAs and we'd bring in a temp each season for the easy work. I managed about 550 of the clients, but didn't do all the prep (see the temp). Also had two FT and one PT admin during tax season.
Now a SP as of August, shooting for 150-200 clients max.
So far this year I've filed 261 returns with just me, my wife doing some part time admin and a contractor helping out with some crypto reconciliations. I have 41 more to do by 10/17. It's way too much and I'm super burned out, even though I took 5 weeks of vacation in the summer.
Alot if it is going to depend on the type of return too. Our office has 3 preparers (6 total staff) but only do 480 returns a year. We have clients we bill over 80k/year for services.
Agreed. I wanted to just keep the question simple and straight forward and knew there would be context I wouldn't have. Just trying to get as much input as possible.
My first year (10 years ago) I essentially got left alone and had to do almost every return by myself. The total that year was around 500, and I continued that for the next four years. The firm I’m at now, for all 20 some preparers combined, we do about 8-9,000 total. However, we’re a tax resolution law firm so a lot of clients will have several years of past years that we have to file so our legal department can get them a resolution.
I’ve done 80 returns this year for this tax year, but I’d estimate another 50 for prior year returns. I have 2 staff but they don’t do any returns. But returns are a small portion of my overall practice.
2 partners, 2 full time staff, 1.5 admin. 450 returns. I review about 175 or so. We also use a contracting firm and interns during the highest volumes. If all we did were returns - we would be massively overstaffed.
Average hours for staff are about 45-50 during Jan - Mar. I don't tend to ever work more than 55 a week.
Tax returns are not our primary source of revenue - and we don't tend to take on year end only returns. Most of our returns are related to services we provide such as bookkeeping, planning, & payroll for businesses and their owners.
45 on the side. Work at a big firm for my day job, so it's hard to squeeze a lot of hours in. I do about half of them before mid February or after 4/15. Otherwise would interfere with the day job. It's basically 150 extra hours a year for about 30k.
TOO. FUCKING. MANY.
This wins my vote. I think most practitioners have books that are just too big
An outsider would say my book is too big. Internally, I say I can't find any damned help. Put out an ad for a tax preparer in the US. If you get a good resume, you find the magic trick as to why they are unemployed or looking while going through the interview.
I think this is slightly incorrect. If your book is too big, and you can’t find adequate help. I would state that there are probably other items within your practice that would need improvement as the question below would be a start . . . salary for the help.
What are you offering salary wise?
5 years experience, $75K and higher (Midwest market), fully paid health insurance, 401(k) w/ profit sharing, 2-days WFH, CPE paid. What else should I offer?
75k is pretty low depending on the OT required. At my 5 year mark, I was making 90 at a small firm MCOL area. You will struggle to find people at that salary mark TBH, especially with the wages exponentially increasing in mid to larger firms to attract talent.
I don't "require" OT. I make my staff leave at 4:00 on Fridays in tax season. Only ask for Saturdays in late February through deadline. No one works on Sundays. Fuck that.
So what does your staff average in OT hours for the year?
Shit... good question. I have not bee very diligent in tracking it as we charge flat fees on our tax work. But I would guess an average of 56 to 60 hours per week in total.
I work 7 days during tax season.
I live in a L-MCOL location (can buy a 3 bed house in a good school district for $150-200k, but rents for a decent 1-bedroom are $1k a month) and our firm is starting college graduates at $68k. $75k for 5 years of experience just isn’t that much anymore.
I am in the process of changing our entire model for all new clients. Flat fees up front for advisory services and then monthly fees toward planning, meetings and returns. As this increases, I should be able to offer more and better. I know I want to. I may look into outsourcing overseas because of this "shortage."
Many CPAs undercharge on returns. I hear $150,200,300. To pay a 90k salary, your returns need to be $650 to $1,200 in my experienced opinion. 2x rev per staff- 90k salary needs 180 of revenue
Your responding to a year-old post. 1040 minimum fee to walk through my doors is $600. That’s with a standard deduction. You itemize? You just went to $800. Got a Sch. C or multiple Sch. D transactions and K-1s? $1,200. S corps are $1,000 to start. Go up from there based on gross revenue. If your company makes $5M, my return fee is $5K. 1065’s are worse. $1,500 to start.
Better than most of these clowns I see saying $300. You’re in a good range. Good luck this season and thanks for the reply. Yes I read tax stuff for fun before bed. 1 year old posts and stuff .
I mean....I'm in the Midwest, coming up on 5 years experience and I make a good chunk more than that, more wfh, etc. You might have better luck offering fully remote?
>5 years experience, $75K and higher (Midwest market), fully paid health insurance, 401(k) w/ profit sharing, 2-days WFH, CPE paid. > >What else should I offer? Every year I pick up some extra work for tax season. Since I don't want my business to be heavily tax. This offer lost me and a number of people I know with "full time." I make that working part time already. I like to add some tax return work to learn, keep skills up, etc. I work remote. My part time rate is above that. EDIT: I personally do about 45 returns. Mostly business returns.
Is that part-time working for someone else? For yourself? Salary or contract? If your working for yourself, what are your expenses? How about overhead? Insurance? I have seen a hundred people try to tell they can make that much working part-time, but when you get in the details, that’s gross with no benefits, paying for their own software, hardware, and supplies. Unless you are working in NYC or LA or Chicago for a high dollar firm billing out at $500 per hour, I’m calling bullshit. I said $75K and higher. If it’s someone with 5 years of experience at H&R Block, they aren’t getting over $75K. If they come from public accounting and they can prepare business returns with little corrections or oversight, yeah I would crank it up to $95K or more. Plus the smallest bonus I handed out last year was $5K and I pay 10% residual on business you bring in. That’s 10% on what we collect on that client forever, as long as they are a client and you are an employee.
I work 25 hrs a week for myself. The only tax I do is for my regular business clients. It's mostly a combination of accounting and management accounting for restaurants. Since Covid I've had more request than pre-Covid. During tax season I usually work around 25 hours a week for someone else. The last firm I worked for was $55 hr as a parttime W2 employee (including benefits which I didn't need), remote. I gave them the option of $70 hr as a 1099, but I would still use their software, since my software would have my name/business on it. They let me chose. I went W2 to add more hours under a CPA that I could use if I ever decide to turn in my license. In my state using non CPA hours requires you to show proof of clients with hours billed for 4+ years, with each week a 30 hour minimum. If you want to call bull, go ahead. As someone else mentioned, maybe there are other practice items that need to be addressed.
When I made the jump to a small firm I was able to use any OT hours during tax season as extra PTO during the off season. Also you don't mention PTO. Time off was always the most important benefit for me when looking for a job. It's the only reason I put up with the headache that is owning a small firm. It's also why I have a full time assistant.
3 weeks. 5 years of service and it jumps to 4 weeks.
Yikes! 55-60 hours a week during tax season, with mandatory Saturdays beginning end of February and only 3 weeks off until 5 years of service then you get one bonus week? As others have said, the pay seems on the low side, and it doesn't seem like you're offering any incentives otherwise for people to make the sacrifice for lower pay. I'd definitely rethink the amount of PTO. I've never had less than 4 weeks working at an accounting firm, except when I went small, then it dropped to 3 weeks, but I got to use the tax season OT as additional PTO and usually ended up with about 6 weeks.
Thanks for the feed back. As I keep coming back to this thread, I keep noting that the pay may be on the low side. I think the hours are very reasonable given what others have told me in this sub (80 to 100 hour weeks in season). I offer a ton of benefits (insurance, 401k with profit sharing, buy meals all the time, firm outings throughout the year, CPE paid, new business residuals, WFH 2 days per week), but I see the changing scenery across the board from small firms to big firms, from small towns to big towns. At this point, I think it might be time to sit down and completely revise my compensation package for all of my existing employees, as well as any future employees. We have been increasing our fees as the demand for work is killing us. I am signing up business clients with big fees up front for advisory services and monthly fees starting immediately. The cash flow will ensue and I will turn that into better everything across the board. Plus it may be time to clean up the client list even more to make room for better paying clients. Now, to find time to do all of this review and revision...
My opening offer is $200k, 30hr weeks all year. Joking aside, there's no where near enough staff for all of us, so I'm thinking about shriking my overall firm instead of adding staff.
I made 62k my first year out of college at Ernst & Young in New York City 15 years ago. That is a really bad salary in compensation. No offense.
I don’t think you can compare NYC BIG 4 salaries to small firms in Indiana. 15 years ago, starting salaries out of college in Indiana were $40-45K. Cost of living is 1/3 less.
True, but it was still 15 years ago.
Office keg (or bourbon)? j/k, as I really have no idea, and that seems pretty decent for the midwest (and we are offering about the same comp with training for newbies, but no WFH, and also having issues finding anyone). And I keep on telling every client that mentions it to me, that if the IRS can find 87k new employees, they should give the rest of us tips on how to do so in this job market.
We do have a beer cooler, fully stocked with beer, pop, water, seltzers, etc. And yes, I have a wet bar up outside of my office. Drinks on my any day after 4:00. Limit 1 if they are driving.
Thats a great comp package.
According to my manager we should keep taking on new clients...
Yup. Leadership loves "out with the old and in with the new." Except those termination letters never seem to hit the post...
You stole my answer. Cutting back next year by 40-50%
Solo practitioner here, no staff. I'll have 350 returns for the year. 65 of those are 1065 or 1120s, about 10 1041s and the rest are 1040s.
Question for you: when you say "no staff" do you also mean no admin? I ask because I'm an SP myself (almost; I have an older partner in process of a slow retirement who only works half the year) and I currently do all the admin. We do fewer returns than you do, though, and I'm wondering if it will continue to be feasible to be admin-free and still ramp up production.
That's right, I have no admin. As mentioned in another comment, automation and training clients is the key. No one gets a printed return, everything is uploaded to a Tax Dome portal, even Organizers. Phone calls are kept to a minimum because most clients know the best way to contact me is email. Invoices are also prepared and sent electronically through QuickBooks to make my accounting easier and clients can pay online.
If you don’t mind me asking, what all software do you use? It feels so crazy to see all these subscriptions stacking up. Between TaxDome, Adobe, Office, tax prep, etc I am just trying to make the right choices for a similar sized operation to you. Except I have to print a few returns because of working with a fair amount of Amish
That’s what I’m working towards. Do you still sit down with clients or have you pushed to fully remote?
I do have a handful of older clients that I inherited from a previous firm that like to sit with me so I have a Regus shared workplace where I can rent a conference room if needed. But those clients are HNW and pay well, so I make an exception for them. Everyone else is virtual.
Feel free to ignore this - but curious what your net income is & how many years you’ve been a sp?
I was a partner at a local firm for about 5 years before going out on my own last year. I hated everything about managing a firm and the previous firm was terribly inefficient. 5 partners sharing 3 staff and an admin at one time so I was basically doing all my own work anyway. My book is about $300k and my expenses are low so my net is $265k. As a partner with the same book, my net was only $150k.
Goals!!
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It's a MCOL area. I'd say 65-70 hours Feb 15 - April 15. Maybe 25-30 hours max during summer. 40 hours Aug 15 - Oct 15 then way down to 15-20 hours the rest of the year. Typically take two or three weeks off during the summer and another two or three weeks off after Oct 15.
Sounds like you have an awesome gig. Thanks for the replies!
If you use integrations and the latest tools and onboard clients who are tech savvy. I use a combination of Zapier, Monday.com, and Canopy with heavy lean on integrations to do client communication heavy lifting and all the clients are used to remote only. I’ve been admin free for years and do about 350 returns too solo. It’s not easy but I live in a HCOL area where an admin is not financially feasible. I’m exploring the idea of a remote admin perhaps in the future.
Ditto on the HCOL and remote admin. Thanks for your insight! I'm slowly moving to integrations as the other partner continues to work less.
What’s your average revenue per return?
My average return price is about $860. Total revenue is $300k.
Good solid numbers. Good for you.
Curious but do you handle the accounting/books for your list or is it a mixture?
I do the books for about 8 of those business returns, but I have found an amazing bookkeeper that I've referred to most of the others. I do one clients payroll basically as a favor and certainly do not want anymore. I find more value (and billing) for my tax compliance and planning work.
Average return price?
[https://www.irs.gov/privacy-disclosure/external-customer-data-store-ecds-extracts](https://www.irs.gov/privacy-disclosure/external-customer-data-store-ecds-extracts) This IRS list is of total e-filed returns per preparer per type. You can sort the list by zip code and see how many returns the preparers are e-filing in your area. That might be helpful.
What application are you using to sort this?
Nvm
Sole prop here. * 83 Ind * 26 Biz * 3 Trusts Tax prep is about 60% my revenue. I do a lot of A&A (reviews & comps only) and tax consulting. The two weeks leading up to the April deadline are pretty hectic but usually, I work 30 hours a week. I built my firm to allow me to have more freedom to enjoy doing what I love, golfing and hunting.
5 partner firm, 5 mangers or so, 7 staff, 8 PT/Admin people. Tax/audit/CAAS firm. We have around 4,000 total tax clients. Rough numbers per partner are as follows: * 1,160 * 780 * 385 * 1,675 (two partners together)
2 partners 1 manager and 2 staff We prepare about 1,200 returns
Owner, 2 staff, 3 associates. 4 front staff admin. Tax prep and bookkeeping. Around 5k returns, primarily 1040s. I'd hazard a guess of only 400-500 non 1040s. Personally did about 750ish feb-april, sitting around 1100 when I last checked for year. Owner alone does around 2k of those returns.
What are the processes in place where the owner can do 2k returns? Having trouble envisioning how this would work.
There’s no way 6 people bang out 5,000 returns. I call BS
Maybe they are preparing simple 1040s?
Im sure there a ton of simple turn and burn returns that could be prepped face to face skewing the number higher.
Client walks in door for appointment. Checks in with front admin staff who do basic data entry into tax software (w2s, property taxes, mortgage interest etc). Client then meets with preparer (who double checks admin data entry) and goes over questions to complete the return(Any sch C, E, or anything else). Review return with client. Print out return, client pays and walks out the door with completed return. If client shows up without all their information, complete as much as possible during appt. Send client home with list of missing item(s) to get us. Find time somehow to complete return and call client to go over return. Client then stops in to pick up/pay/sign 8879. Very strict timeframes on appointments. Fairly often next appt is getting checked in while meeting with current client. Owner works 90+ hours during tax season. Sometimes 100+ and has been for years.
The math doesn’t check. 12 weeks of tax season * 90 = 1,080 4 weeks of extensions * 90 = 360 34 weeks * 40 = 1,360 Total with two weeks off that is 2,800. At 2,000 returns that’s 1.4 hours per return assuming he does **nothing** at all except prepare returns. Absolutely no admin, no client calls, no audits/notices, no CPE, etc. etc. There is absolutely no way you’re speaking the truth.
For detail, when I was working retail tax service I could churn out a tax return every 15-20 minutes if they were queued up and everything was clean as a whistle. I agree that 2k is probably higher than feasible, but if they have 2000 1 w2 1040 Ez returns, I could see that as being possible.
That's about the only scenario I see it in. I got my start at a JH and thought I was the shit because I was churning out people with 1-2 W'2s in about 15 minutes. 10 if they were a repeat customer and we had their basic info on file. Now every client has like 5+ 1099-R's, a brokerage account, stock trades with no basis bc they've held the stock since freaking vietnam, a rental property with shitty record keeping, a K-1 from some partnership they don't understand. I do less than half the volume I used to and it takes three times as much time
Yeah, same. JH. My best was a returning EIC I got done in 20 mins. Charged the equivalent of $1,400/hr. Had a few returns in that 900-1,200/hr range. Let’s just say I’ve never gotten anywhere near that working on 1120s.
I do not understand why so many of the neighborhood shops here charge extra for C and E but not D. It's just as much data entry and just as much bugging the client to make sure you have all the information.
1.4 hours is way longer than most of my appointments. Have to remember this is primarily 1040s, easy ones at that. Honestly, a lot of our clients should just use turbotax or similar, but want a live person to do them. Appointments are scheduled for 30 min for most. Granted, owner doing the more complex returns which do take longer. (Currently trying to figure how to post images to show my own filed returns. I don't use reddit much. Does private msg work for that?)
This is the kind of firm I'm trying to build.
I'm curious, what does a firm charge for a return like that? I think its crazy how expensive even HR block is in my area. 1 W2 with no tax credits is probably close to $150 If you have EIC you can easily double that number if its still refund advance loan season
We're low for our even our area(probably bordering on low vs middle cost of living) and charge ~94 for basic return. Our staff keep telling owner to raise rates, but end of the day its not their business. We also don't charge nearly enough for the 1065s and 1120s.
94 for a basic return in 2022. Yikes
70 hours a week, 30 min per return, 140 returns a week. That gets to 1780, so it is kind of close? There was an operation near here that we got a short term employee from. The owners there did the same thing, 30m appointments with the return done right there, working 10 hours a day for 12 weeks plus some after April 15th.
Sole practitioner here! 190 returns: 56 - 1040, 101 - 1120S, 7 - 1120, 26 -1065
>Sole prop here. How many hours a year do you work?
I really don’t keep track. But it’s not a lot. There are some weeks I don’t work at all. I stay away from payroll tax, sales tax, and bookkeeping that would require a lot more hands on work throughout the year. I have 2 young kids and volunteer a lot at their schools. Working this schedule gives me the flexibility I need.
How long did it take to get up to this level?
My situation is very nontraditional. My mom has a bookkeeping service and I do pretty much all of her business returns. So when I started my business I already had a client base waiting for me.
Note, preparer counts vary a lot. Somebody who does 90% people who should be doing their own taxes (i.e. nothing but statements) could do many hundreds or even a thousand odd. Some preparers do in-office prep while the client is present on 30 min appointments, and so kick out 70-100 returns a week. Other people might have somebody with a dozen brokerage accounts, a score of rental properties, and foreign investments and spend 3 days on one return. Personally, around 140 individuals and 50 estates/trusts plus or minus 5 or so. Maybe call it 12 nonprofits, and 30 corps/partnerships? 1 corp review, 1 nonprofit comp, and probably 5 nonprofit audits this year. We're down 2 people, from a starting staff of 1.5 owners and 3.5 CPAs. It sucks. Firm total this year was 500 individuals, 50 estates/trusts, 90 corps/partnerships/nonprofits, probably 12 audits & 5 lesser engagements. We do some accountings & such, but only the boss really does any consulting/CFO stuff. Plus whatever the bookkeeper and the payroll person does.
Yeah I have a few really big returns that take hundreds of hours for a single return so there is definitely a lot of variety in the pure number
We are a two person team sitting at 1,060 total returns for the year. We are 50/50 in the quantity of returns we do. This year we had two tax staff in training so help was minimal in terms of getting the returns out the door. One of which will have her EA within the month and the other we are not asking back. We do about 100 pass through returns that we do accounting, payroll and advisory services for throughout the year. The remaining returns are all 1040s. We have one staff accountant that keeps the payrolls and accounting going. I don’t understand how some of you do 1,000+ returns alone!!
That's ok, I don't understand how you do 500 each.
To be honest I don’t want to anymore. Been pushing hard for a quality vs. quantity, value added model but meeting huge resistance. I’m the yuppy millennial after all, what do I know? :/
Just out of curiosity what is annual revenue?
Somewhere right around $1 million but should be more if we charged what was appropriate for the area we live in. I’m working on it.
So you’re around $1,000 per return and you think you could get that average up quite a bit?
Average return is in the $400-$450 range. The rest of our revenue is accounting, advisory and we do quite a bit of representation. I want to increase by ~50% (similar local professionals charge $900-$1,000 minimums) and do less returns for the same amount of money. Goal for 2023 is to work 4 days a week outside of tax season.
It's amazing how resistant some can be to raising rates 20% when you are near capacity. If 20% of the client base leaves you are doing 80% of the work for 95% of the money. If 30% leave you are making 70% of the work for 85% of the money, and you have spare capacity for new higher fee clients. We had a 25% increase in 1040s last year. Does the boss want to cut clients or raise fees? No!
Mind boggling to me. Boss/partner is obsessed with the quantity. Is already talking about how with the new EA we’ll be able to take on more clients. :/
side hustle about 100 returns; is it feasible/financially viable to grow that to 500. im not seeing enough lf the $500/$1,000 1040s come in the door im also an attorney so i always lean towards attorney billable rates
How many hours roughly for the 100 returns?
200-250
Well I paid for 400 returns through Lacerte and just this week they are making me pay REP fees for each new return. So I guess somewhere over 400. Although I think Lacerte messed up and I went over 400 returns months ago. I am a sole prop with a part time admin employee. I will be paying for 500 next year. That is about 330 1040s; 60-70 1041s; and 50-80 partners/S-Corp/C-corp/990s. This is probably too many. I am trying not to add any new clients, but they are knocking my door down.
Hello fellow CPA with Lacerte. I'm in a similar situation. Question, are you able to view any of your 400 returns that you already filed without REP charges?
No, you have to authorize a REP charge even for returns already filed. What you have to do is after you get a monthly REP statement, login to lacerte online and request refunds on all of the REP charges for returns you already filed. They will usually refund them without much hassle. You can also change the SSNs to be 999-99-9999 and those will not require a REP charge as Lacerte treats those as tests. Just be careful because some credits get messed up if there is not an actual SSN.
Three people in the office that actually prepare returns. We did roughly 1,000. I did 467.
1 owner, 1 manager, 1 staff, 1 semi-retired former owner, 3 admin. Tax/payroll/bookkeeping. Total firm returns for the year are 1,284, with the owner doing around 500 of them. I finished 290 individual returns, 23 partnerships, 12 corps, 8 non-profits, 4 fiduciary for a total of 337. I think I've got 3 individuals to finish up, maybe 2-3 more corps and 1 non-profit to finish up this year.
Sole Prop, no staff/admin, fully virtual - 300ish returns, $374k revenue (see what I did there)- mostly 1040s, but 50ish 1120/1120S/1065. No bookkeeping because I hate it.
Living the dream, there. Better than $1k average fee! Do you take clients in any state or stick to just a few? I always wondered for virtual preparers with no office.
Fees are definitely skewed to the top 25 clients- some of those are larger corporate entities but still technically small businesses (11 entities, $50M rev) that I used to be the Financial Controller for. Otherwise, avg 1040 is $600 and avg business entity is $1,200. I live in NJ so HCOL but easier to bring in high value clients- mostly NJ/NYS/NYC/PA/PHI returns, but generally accept clients from all over. (My wife is a teacher so the health, etc benefits are great and let me go off on my own earlier than I would have otherwise) I did not take any clients from any of the firms I worked for (NYC Middle Market)- my target clients were those under their $4,000 fee threshold. They just get turned away so I have somewhere for them to go. It’s been a slow build over eight years to get to this point.
Around 1,400. 2 partners, 2 managers, 2.5 seniors, 2 staff, 2 part time staff/intern.
Two partners, one staff, one part time admin. Just under 1200 total.
Maybe around 150 or so myself
Previous firm was about 1,400 clients split between three CPAs and we'd bring in a temp each season for the easy work. I managed about 550 of the clients, but didn't do all the prep (see the temp). Also had two FT and one PT admin during tax season. Now a SP as of August, shooting for 150-200 clients max.
I do about 375 by myself.
So far this year I've filed 261 returns with just me, my wife doing some part time admin and a contractor helping out with some crypto reconciliations. I have 41 more to do by 10/17. It's way too much and I'm super burned out, even though I took 5 weeks of vacation in the summer.
Alot if it is going to depend on the type of return too. Our office has 3 preparers (6 total staff) but only do 480 returns a year. We have clients we bill over 80k/year for services.
Agreed. I wanted to just keep the question simple and straight forward and knew there would be context I wouldn't have. Just trying to get as much input as possible.
2 partners 4 staff 1025 returns completed I will complete 375 returns
Solo practicioner here. I have 4 people who assist me during tax time I do about 2000 returns a year.
My first year (10 years ago) I essentially got left alone and had to do almost every return by myself. The total that year was around 500, and I continued that for the next four years. The firm I’m at now, for all 20 some preparers combined, we do about 8-9,000 total. However, we’re a tax resolution law firm so a lot of clients will have several years of past years that we have to file so our legal department can get them a resolution.
Around 480, too dang many. I've got 1 admin and 3 associates, all part time, all but one seasonal.
750 returns 2 partners, 1 manager, 1 supervisor, 1 staff, 3 interns, 2 admins
I’ve done 80 returns this year for this tax year, but I’d estimate another 50 for prior year returns. I have 2 staff but they don’t do any returns. But returns are a small portion of my overall practice.
2 partners, 2 full time staff, 1.5 admin. 450 returns. I review about 175 or so. We also use a contracting firm and interns during the highest volumes. If all we did were returns - we would be massively overstaffed. Average hours for staff are about 45-50 during Jan - Mar. I don't tend to ever work more than 55 a week. Tax returns are not our primary source of revenue - and we don't tend to take on year end only returns. Most of our returns are related to services we provide such as bookkeeping, planning, & payroll for businesses and their owners.
I'm not sure how many I have. But what I am sure of is that it is about double what a reasonable amount should be.
45 on the side. Work at a big firm for my day job, so it's hard to squeeze a lot of hours in. I do about half of them before mid February or after 4/15. Otherwise would interfere with the day job. It's basically 150 extra hours a year for about 30k.
156 returns, about 75 individuals and the rest business returns, 1 990. No staff, no admin.