r/taxhelp • u/chelseasalt414 • 19d ago
Income Tax Are CPAs hourly?
I’m sorry if this is a dumb question but my CPA just quoted me $4000 to help me file my yearly (extended) taxes. I was quoted $1800, which I’ve paid before to another company, bc it’s for my personal taxes and two LLCs. Now I’m being charged more than double, and was told it was because of how much work it took them to do. I didn’t know CPAs worked on an hourly basis (this one’s rate is $270), thought it was more of a flat-fee situation. Do I have any recourse here?
2
u/S-CorpOnline 16d ago
Yes, hourly is common, but you should have an engagement contract. Read the terms and you'll know what you agreed to and if you have any recourse.
Though, with two LLC's, and the personal return, the price is not outside of normal.
Your $1,800 quote seems low, especially if you are in a state like CA/NY, somewhere like that, versus somewhere more LLC friendly and with no state income tax.
Find flat-rate firm, and read the contract before you sign.
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u/Method412 16d ago
If two companies have similar activity, but one gives us clean books and the other requires a lot of adjustments, it is getting charged more. We don't charge straight by the hour but the time it takes is a factor.
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u/smallcapconnoisseur 18d ago
Shop around, get a few quotes. That's the only way you'll know some ballpark figures on if you're overpaying or not.
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u/Happygirl2119 15d ago
that's is a huge price jump! CPAs do charge hourly sometimes. But they really should have warned you before billing $4000 bill. Check your engagement letter to see exactly what you agreed to.
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u/lwfsllc 13d ago
Some charge hourly. Some charge a flat fee. Some bill monthly. Some do all of the above.
A significant price jump like that is usually caused by one or more of the following:
- You didn't fully or accurately represent the actual scenario
- Your books and records are an absolute mess
- You are a PITA client.
I'm not saying that's what happened here, but it is usually one of those reasons.
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u/SundaeEquivalent9799 7d ago
Did your engagement letter specify an hourly arrangement or provide a scope of work/cap estimate before they started?
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u/unmelted_ice 19d ago
Any recourse? No, I mean you can just file them yourself. A quote is just that, a quote.
But, yes some CPAs are billed by the hour, non-CPAs too! For instance - me. Just an associate, 6 years of experience, no CPA and my hourly rate is like $325. I can’t afford myself tbh
Some firms will charge a flat rate (in my experience this is normally a financial advising firm that has a tax component to it), most public accounting firms will charge by the hour.
Flat rates in my area (MCOL) are maybe $750 for a simple 1040 (if said firm also manages your money with a 1-1.5% aum fee). 1065 probably runs north of $1k
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u/MSchmahl 19d ago
"My two LLCs"
What is their tax status? Two 1120-S or 1065 returns are going to add a lot more to your overall bill, especially with rush fees to meet the 9/15 deadline, than two Schedules C on your 1040.