the Price of Business Accounting Services

I went to a CPA (Certified Pulbic Accountant) to have my business tax returns done in April 2008. My business is set up as a sole proprietor, so she prepared and filed a 1040 and a Schedule C. I brought my checkbooks and a list (on paper) of all cash and credit card purchases. I had the checkbook organized into categories, which detailed where all of the spending went. The charge was only $150 for the return. For those of you who have a business, you will understand that this is an amazing deal. Last year, it cost me $695 (also from a CPA, but in a different zip code).

The minimum this new person charges is $75 per 1040 return, but mine was more because of the schedule C.

She seems to be great. An extension had to be filed, due to an inorganizational problem on my behalf and a time constraint on her behalf. She said that they will be done in less than a month. She was able to estimate how much I would be expecting to pay, based on my last year's return, and it literally took her less than 5 minutes; something that would have taken me days to figure out. I was very hesitant aobut spending the money (mainly because I thought for sure it would cost close to $700), so imagine my delightment and surprise when she told me only $150! She just moved from a different state and her business has only been open a few months, so I don't know if that's why she was so inexpensive, or if it was because of the area I live in (low cost of living). I will now use her for all of my accounting services. For non-tax preparation services, she charges $85 an hour.

If you are a business owner, DO NOT go to a chain tax service for preparation and filing. My banker strongly urged me away from that. Also, call around and ask for prices. Find out ahead of time what forms you will need filed and ask exactly how much they will charge for each form. I found them all to be upfront and honest and I was very surprised at the inconsistency of the pricing. CPA's are generally more, but are more knowledgeable about what you can write off. I have no doubt that I would still be working on them if I didn't find her! It is worth the money to have someone else do your business accounting for you.

Also, if you do your accounting with a software program, I have found that the CPA's generally charged less. Most of them were going to put my data in their computer and charge additional hundreds for this service because it is time consuming. I could have purchased my own software and entered it myself for what they wanted to charge. So I highly suggest you look into getting something like that. There is a way to transfer your data into their system so they can do very little math on their part.

If you are against computers for your book-keeping, then tell the CPA upfront that all your enteries are on paper (mine was a paper ledger system), so they know what they are getting themselves into. I could tell that most of them didn't even want to be bothered with a system on paper.

Also, if you need to file for an extension and the accountant is charging you....that's just wrong. You can print the form off of the IRS website and send it in yourself. There is very little to fill out on that form and it's pretty simple.

Hope this helps!