What is the minimum fee you would charge for a basic T1(includes one T4, one RRSP contribution, and one T5 slip) for a new client ?
- $100
- $200
- $300
- $400
- $500+
Some CPA firms charge higher fees to limit number of clients that they take on.
My minimum fee is $200 per Canadian return but I do that to discourage basic returns because I specialize in international tax issues and tend to do a lot of US returns as well. Surprisingly few callers even blink when I tell them that although I then tell them to go use wealthsimple.ca’s online tax program to do it themselves for free. I don’t want to do those sorts of returns.
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Thanks! It is great that you’ve found your niche!
I direct low-income taxpayers to volunteer tax clinics nearby.
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The answer for me is: “it depends”.
I have clients whose kids have grown up (although to be fair the vast majority are now beyond the “simple return” stage but…they have kids?). Most of those I just throw in. They’re not difficult, time consuming or annoying and my clients appreciate it as typically I’ve been doing their returns for decades.
If some new client comes asking…I just say I don’t do them and refer them elsewhere. Mostly.
Every once in a long while, one shows up where I find the person “interesting”, usually because of what they do, sometimes just because of how they present themselves. Most of them I do for a C-note, sometimes less and rarely, but occasionally, for free.
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I try to keep my minimum fee around $300. I don’t know about your market but I find our larger local firms have shed most of their T1 business and there aren’t many good tax preparers around.
Supply and demand can support higher fees. Why price yourself in the low end when you could keep just as busy at a higher rate?
Like @SmallBizGuy, I sometimes accept T1 clients based on their situation rather than price but I keep those numbers low.
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I charge on a per schedule / slip basis using TaxCycle’s price module. I would be at $100-ish mark for a return you are describing.
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Thanks! A few years ago, a mid-sized firm I know charged reasonable fees to serve smaller clients. Now, it has raised its fees to around $750, creating a higher entry barrier. It seems they don’t want new business at all
That’s a good pricing strategy. I want to design one where no clients can bargain or get overcharged.
I have a fairly small practice. I did a quick analysis the other day. Over half my clients are referrals from a client who came in as a small corp, quickly transitioned to a family T1 of 3.I’ve never billed them much but without their referrals, I’d have quit a long time ago.
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This year my price is up to $79 for a single, simple T1 (T slips only) or $128 for a couple. I can usually do the entire return - start to finish, while the client sits across from me - in 30-40 minutes, including printing and signing and creating an invoice in Sage 50, so it’s profitable at that rate. Of course, most of my T1 clients have more complex situations, so the AVERAGE price per person last year was about $200.
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Last Year I raised my basic price from $145 to $225 – with T776s & T2125s etc we had many returns that were well above $300. I’m in my mid eighties and thought that would discourage enough people that I’d have a smaller work load. We were still very busy, and less than half a doz. people even commented on the price. Still trying to retire, but because I was quite profitable last year I will not raise my prices, so I’m telling people this year to get in early because once I have all the returns I and my one assistant can handle we won’t take any more returns. My retirement plan is, no returns after Jun 27th, my 85th b’day, but we will look after reviews till December 30th.
I do give big discounts to seniors & students who have low income.
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@gaywise And I thought I was an old-timer, is my 45th taxseason…
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gaywise
January 30
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Last Year I raised my basic price from $145 to $225 – with T776s & T2125s etc we had many returns that were well above $300. I’m in my mid eighties and thought that would discourage enough people that I’d have a smaller work load. We were still very busy, and less than half a doz. people even commented on the price. Still trying to retire, but because I was quite profitable last year I will not raise my prices, so I’m telling people this year to get in early because once I have all the returns I and my one assistant can handle we won’t take any more returns. My retirement plan is, no returns after Jun 27th, my 85th b’day, but we will look after reviews till December 30th.
I do give big discounts to seniors & students who have low income.
Did my first T1 1962 with a pencil and an adding machine. I interviewed and prepared, partner reviewed, typist typed 3 copies with carbons, I checked and assembled. Client picked up. Basic fee $3.50
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Apparently that is around $ 37.00 adjusted for inflation.
I think fees have gone up a bit.
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My Google says 344.90 today. My time is lower but my rates are up. My floor is 125 these days and that’s too low.
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I will have to fire my google source. I should have used my own brain a bit.
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Do you have any tips for staying sharp and healthy?
Nothing unusual or amazing. I ride a bike and do my best to get out at least a couple of times a week during tax season, more the rest of the year. A little bit of strength training and do my best to eat right – though I eat more sugar and junk generally during tax season. It’s not easy being a tax preparer, you all know that. And, of course, doing tax returns and keeping up with changes keeps us pretty sharp.
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Thank goodness I no longer have to do 300+ T1s by hand…those were hard times by certain comparisons.
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