Posted by: LYF | March 31, 2009

This is why your tax bill is so high…

In no particular order.

  • You’ve given your accountant half your information.  You thought this was a good idea didn’t you?  Oh, he’ll just work on this while I get my other stuff together.  No.  This is a weak-sauce decision.  Your accountant will complete your file.  Then he’ll have to go through it again.  Every.  Time.  You.  Give.  Him.  More.  Information.
  • You’ve decided to prepare your tax return and then give it to your accountant.  Did you really think this was a good idea?  If you’re that competent, then do them yourself.  Can you comprehend the ridiculousness that ensues when you do this?  Someone will prepare your tax return and then they’ll have to check it against your numbersThis will take at least 4 hours and cost you at least an extra $400.  Do you know why they’ll have to do this?  Because if the accountant comes up with a different taxes payable than you, you’ll start thinking he screwed up.  Ohhh, but I calculated my taxes to be $500, how did you get $1000?  I’d rather be this bear then deal with that.
  • You thought it was a good idea to hand in a nominal donation slip after your taxes were filed.  Everyone listen to me.  If you have a $10 donation slip and your taxes have already been filed, DON’T GIVE IT TO YOUR ACCOUNTANT.  When people do this, I get the urge to gouge my eyes out with a grapefruit spoon and listen to the hampster dance on repeat.  It will take an hour to make the adjustment and it will cost you at least $100.  Do you know what that donation slip saved you?  At most, at the absolute very most?  Under $5.  If I use my accounting powers I can see that you’ve just cost yourself $95.  LIFE FAIL.

Accountants sell time.  Remember that.

And yes I’m pissed off because it’s busy season.


Responses

  1. Most of my tax returns have a built-in nuisance component. Client craziness + disorganization = higher bill. It’s just that simple. And like you, nothing pisses me off to high hell than working on the same file 10 times because of all the time taken just to find the stupid slips.

  2. yeah, it’s brutal!

    I also hate when client’s write stupid notes on their info. People, you don’t need to write things like “capital loss, umm I think I can carry this back 3 years” on an investment statement. I know that.

    Also, don’t use accounting lingo. For example, if you receive something and it’s incorrect, don’t tell me its “materially missttated.” It’s annoying and passive agressive.

    Here are other words that you shouldn’t be using – GAAP, GAAS, IFRS, IAS, materiality, scope, working papers, income tax act (we’ll look it up, not you) etc.

  3. The solution is, of course, heavy drinking. Perhaps someday we’ll perfect time travel so we can zip past these months into the blissful summer.

  4. Also, that client that kept bringing in slips has now been moved into the “file on April 30″ pile. That’s my little bit of revenge.

  5. Accountants may sell time but professionals offer thier clients results. Clients don’t care about time and to limit yourself to the minutes on a clock severely limits your earning potential.

    • I really have to disagree, especially since a client’s bill is based on time (at least conceptually before people massage it a bit). If you quote a personal tax client $1,000 and end up spending $2,000 worth of time, they are definitely going to care when you give them the bill.

      I’ve seen this happen a bunch of times. A client comes in, says they run a simple business out of their house and they get quoted x. Then come tax time, they show up with a bag full of receipts that will take at least a day to go through. Now their bill is way more than you originally told them. You either have to eat the time (sucky) or give the client a bill that’s twice what they expected (extra sucky).

      I completely agree that you can’t limit yourself to what’s been budgeted. I was just trying to explain certain situations where clients unnecessarily inflate their bills – “unnecessarily” being the clutch word.

  6. What is the appropriate way to question or challenge an accountant’s bill?

    Are there general guidelines for billling of services.

    For example, if you call to request an in-person meeting – expecting to be charged for the meeting – is it normal to be charged for the meeting request?

    What about redundancy? Keeps sending same info and charging for it?

    What about charging us for the time the enrolled agent sits on hold waiting for the IRS?

    • Tax bills usually depend on complexity, where the more complex a return is, the longer it takes to do and the more it costs. Judging from your comment, it seems that you disagree with your bill.

      [If you actually understand how taxes work and have compared your bill to other people's bills who have similar income then continue reading. If not, then read the last paragraph.]

      If you don’t agree with your bill then call your accountant and ask why it’s so high. You could even ask for the wip (work in process). This is a printout of the total time/dollar value of the work done on your return. An accountant might not give this to you – I highly doubt it – because it will show you how much they’ve increased your bill. This isn’t “unfair” it’s just a typical mark-up. However, you may not feel the same way.

      There are no general guidelines when it comes to booking time. None. Personally, I only book time when it’s greater than 15min. I’m sure other people do things in other ways. You may find it helpful to start thinking about things on a $/hour basis. For instance…

      is it normal to be charged for the meeting request? – maybe a 5min call, highly doubt you’re being charged for this.

      What about redundancy? Keeps sending same info and charging for it? – administration/office secretary would do this, not your accountant. There’s nothing to charge. Accountants send you stuff because we don’t want to keep it. It’s technically yours anyway. Our desks are cluttered enough already, we don’t need any more help.

      What about charging us for the time the enrolled agent sits on hold waiting for the IRS? – I definitely charge for this. This can take a lot of time.

      [this is the paragraph you should skip too]

      You sound high maintenance. This is a bad thing to be. All accountants lament about difficult clients. And I know people who bill difficult clients extra. There are always situations where you could either bill a client or not. Accounting is full of gray areas. In those situations, if you’ve managed to annoy your accountant he is more likely to bill that time than forget about it.


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