Tax Pro's Fees for Tax Return Preparation

June --

I am actually sending this for my wife. How much should an accountant charge for doing your taxes? I know I overpaid and it will be a deduction next year. I am learning more and I think I can handle the taxes next year. I went to the pro to see what expenses I missed and I really didn't do that bad the first year so I think I can handle it especially if I have your list of business expenses.

Yvonne's husband in NYC

Hello Caring Husband,

I wish I got a little more info from you so that I could give you a better example of how your question would be posed to someone in your profession.

Let me try. You said your business is Technical Design Consultant/ Fashion Industry, so, here goes: How much should I spend on my 2007 wardrobe? Or, how much should I spend on the design illustration of our main chemical process for my annual report?

You see what I mean? I have no idea of the complexity of your return. Is it a $10,000 or a $500,000 business? Is there an inventory? Are your records professionally kept or do you arrive in the office with estimated amounts? Do you have children? Investments?

And then there's the question of the skill and experience of your tax professional, better skills and experience mean higher fees. And of course, location, for instance, fees are higher in New York City than in Espanola, New Mexico.

A popular tax prep franchise did a return for my friend with only one W-2 and nothing else, and the fee was close to $200. My friend was their retuning client so she was already on their computer and so I estimated that the return took about 20 minutes to prepare. That's a fee of $600 per hour.

So, to answer your question, depending on location, tax professional's competence and complexity of the return, fees vary. Accountants typically charge from $40 to $260 per hour. A very simple self-employed tax return for a returning client with one resident state might take three or four hours.

It's admirable that you are learning more about taxes. The more you know the better prepared you will be to take advantage of all business deductions. Also the better prepared you are the less time your tax pro will need and so her fees will be less. Keep up the good work and your wife can put you on her payroll and give you employee benefits and then you'll pay less tax.

Check out the post below, Pick a Tax Professional: Experience or Price .

I suggest you read my book, SELF-EMPLOYED TAX SOLUTIONS. It answers many indie tax questions in the same easy to understand style you'll find in the columns on my website. And more than just answering those taxing questions, the information in SOLUTIONS will give you a firm foundation on which to make indie business decisions.

Keep in mind, I do not recommend any self-employed do his own return unless it is impossible to find a competent pro!

-- June