Can anyone with Accountant / Tax knowledge help me?
September 29, 2014 8:02 PM   Subscribe

Got my bill today from my accountant...Can anyone tell me if these fee's are legit? They seem pretty high and im hoping someone with knowledge in this could elaborate or confirm these fees are standard. Thank you!
posted by red47Apple to Law & Government (13 answers total) 2 users marked this as a favorite
What does your contract with your accountant say? Any fee that you agree to is legitimate. There is no such thing as a "standard" fee, especially given the wide variance of companies that exist in the world. If you disagree with the fees and your accountant does not reduce them if you ask, you need to find a new accountant.

I realize this answer is less-than-helpful, but it is responsive to the OP's question.
posted by saeculorum at 8:09 PM on September 29, 2014 [2 favorites]

Response by poster: I guess im looking to see whether or not my accountant is charging too much. I'll pay regardless but if her fees are way over average then I will go to someone else...i just dont know what average is!
posted by red47Apple at 8:11 PM on September 29, 2014

Based on the scope of work, that seems very reasonable- around $200/month for payroll, tax prep and misc other accounting? If you aren't happy with the work, then I'd look elsewhere. Otherwise, this is a very difficult question to answer not knowing the intimate details of the size of your company, the scope of the work, etc.
posted by Nimmie Amee at 8:18 PM on September 29, 2014 [4 favorites]

Then is your goal to poll us to determine what we pay? Or if there is a way to cut costs?

You might want to consider using payroll services(google it - I use one, but it doesn't look like that is what you are asking). I use that for my small business (although I just pay me as the employee) and most of what you are being billed for - payroll service, prep of w-3, quarterly payroll, is covered for about $40/month. They email you reminders to go on and review and hit "submit" to send it to file.

I did look into hiring an accountant to do those things before and they were citing similar rates as to what you were paying - but after I reviewed the service, I feel more comfortable with the payroll service - automated, I can get reports whenever I want, it is electronic, etc. but that is what I feel comfortable with.

I do pay an accountant for the preparation of the corporate taxes - similar to what you pay(~$700 or up to $1000),although I am in NYC. This also depends on what type of business you are; S-corps, for example, have more difficult taxes to do vs. an LLC.
posted by Wolfster at 8:25 PM on September 29, 2014

You say they seem high... compared to what? What I'm seeing is pretty reasonable for completely outsourced payroll and tax prep for a corporation, at least where I live in NYC. Why do you think the fees are high? Is this for an entire year of accounting, payroll, and tax prep?
posted by bedhead at 8:32 PM on September 29, 2014 [1 favorite]

$700 for federal and state returns combined? $50 for quarterly payroll returns? $50 for monthly bookkeeping? Wow, you are getting a bargain.

That isn't to say that your needs might not be better served with a payroll service, but I think you are getting very reasonable rates in any market.
posted by Tanizaki at 8:42 PM on September 29, 2014 [3 favorites]

A little over $2k for a year's bookkeeping, bank reconciliations, payroll and tax prep? That is very reasonable.
posted by readery at 8:42 PM on September 29, 2014 [2 favorites]

As a point of comparison, we pay $525 for our family tax returns, which are pretty straightforward (modulo we have a rental property behind our garage). And we have no state returns. So I would imagine---but I have no actual idea, and might have researched beforehand---that $700 for corporate federal and state returns is not out of line.
posted by leahwrenn at 8:50 PM on September 29, 2014

Who is the client? A single business person? Any employees? What type of revenue and taxes are you talking about?

It's hard to imagine how these are not reasonable fees, but you haven't given us any contextual details. Give us some info on the size of your business and you will receive more nuanced data points.
posted by barnone at 9:06 PM on September 29, 2014

It's really impossible to tell without knowing your revenue and payroll.

"Quarterly Payroll Return" indicates that there was a non-trivial payroll. The more you process the more frequently you are asked to pay. Our company was first asked to pay annually then semi-annually, then quarterly, then monthly.

Monthly Quickbooks, Data Processing, Bank Reconcilliation, Payroll Recording all seem in line to me.

For sure shop around, especially for an accountant with experience in your industry. In my experience accountants and accounting firms depend on the success of their clients and are interested in their clients being successful. They don't last long if they don't. Accountants are a great source of free advice as they see how businesses succeed and how they fail.

My first advice to anyone starting a business is to talk to an accountant.
posted by vapidave at 11:44 PM on September 29, 2014

These fees are reasonable IMHO, yes. Obviously, if you're the sole employee and the company is earning $20K a year, $2,135 is a huge chunk of that, but if that's the concern you'd probably get more helpful answers if you were forthright about that.

I am concerned that you are asking this question, though. They are very structured fees; did you not know what the fee structure was when you hired your accountant to do payroll, returns and reconciliation for you?
posted by DarlingBri at 4:28 AM on September 30, 2014

Given that this includes bookkeeping as well as fed and Massachusetts returns, yes, I'd say this is reasonable. If you are just an S corp with you as the only employee (paying yourself a reasonable salary, as is required), then you can probably save by outsourcing that portion to a payroll service. However, your accountant is probably giving you a break on the bookkeeping fees because you run the tax prep and payroll through them as well, so dropping some services may cause an increase in price. Unless you have very few monthly charges, monthly bank reconciliation can be quite expensive and you're getting a great deal. Plus, the accountant is preparing your returns, so the data should already be organized/classified in the way they want it for the return (depreciable assets vs deductible expenses, etc). The tax prep fees will probably go up as well if the accountant isn't doing the books, because they'll have to spend more time organizing the data you send them and probably will require more back and forth in getting the needed data.

Basically what I'm trying to say is that you're getting a steal. If you trust this person and like working with them, I'd keep them. Thank them for their work (and bargain rates!) by paying your bill promptly.
posted by melissasaurus at 5:12 AM on September 30, 2014

I sure wish I was paying this little.
posted by RJ Reynolds at 8:31 AM on September 30, 2014

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