Estimated Tax Pricing

[Sarah Huang]

Hi tax experts,

I am getting a new client who needs help to pay his LLC's estimated tax quarterly. He will prepare a spreadsheet for the profit and lost / P&L. His current CPA firm charges him $450 each quarter and he is not happy. What is the pricing range I should charge please? 

Thank you in advance for any input!

[PhoebeRoberts]

At least $500 per quarter. Someone's always going to be cheaper; it doesn't have to be you.

[PhoebeRoberts]

I'd give them a rule of thumb ("book income times X%, rounded up" or similar) to apply to their own spreadsheet for no additional charge over the price of the tax return. But if a client wants skilled work done four times a year, they need to expect to pay for skilled work being done four times a year.

[Strongsilence-CPA]

$300 per quarter for first 3 quarters. Then, ask or argue or demand or persuade your client that he/she needs to do tax planning in December. For Tax planning charge $700 and tell the client why your value is especially important in December.

[BobKamman]

What kind of LLC pays tax?  Most of them are partnerships or S corps, so it's really the owners' taxes you are estimating and you need to know what else is going on with their finances.  If it's paying tax as a C corp, tell him that when he gives you the profit you'll multiply it by 21% and bill him $100. 

Or is he talking about quarterly payroll returns?  There are companies that do that, even for small business, better and cheaper than you.  

[rbynaker]

Too many variables.  How many states?  Is there PTET involved?  If we're just trying to avoid penalties I tell clients they can make safe estimates (for free) or they can pay me to calculate their tax return four times per year.  What they pay me I'm keeping.  If they pay the IRS too much, they get it back later.

[Strongsilence-CPA]

Hi BobK,

I assumed that the OP is speaking of an SMLLC.  

[Strongsilence-CPA]

If they pay the IRS too much, they get it back later.

Our value includes preventing this situation and I think the OP and her client desire a -0- return, or close. 

[BobKamman]

Sometimes our value includes telling clients to pay 8% interest to IRS while leaving their funds invested in stocks like INTU, which gained 12.5% just today.  That's exactly what I did with two returns I completed today. One client is paying $161 while their investment account grew by 20% last year.  The other is paying $671 while her IRA grew by 5% even though she had to withdraw 8% of it.  Both have most of their funds invested in mutual funds at Fidelity.  Past performance is no guarantee of future results but still -- there's more to life than worrying about taxes every two or three months.