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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Recently I built a small ecommerce company (Inc). I dont ex

Resolved Question:

Recently I built a small ecommerce company (Inc). I don't expect much sales for the time being. I don't know how much it costs to ask a CPA to report the company tax. But I know it should be expensive. Could you tell me roughly how much should I pay for it? Isn't there a CPA to help small company whose financial status is not good? Thanks for the answer in advance.
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

DearCustomer

 

CPA's, like attorney's, have a wide variance in how they conduct their practice. Some charge a retainer fee as you are indicating here (regular periodic payments, etc), all based on a level of service.

 

so for example: if a CPA is maintaining your books, then they will want to be paid a FMV for thier services. Like wise,when they prepare your taxes the want to be paid for that. It is only fair.

 

so the question is, how much do you expect a CPA to work for? 8 dollars an hour, 35 dollars an hour, maybe, 150 dollars an hour?

 

so if the person is maintaining your books, where you turn in copies or receipts and invoices, then 150 dollars every quarter is very reasonable. It takes 2 or 3 hours and sometimes more to put together receitps and invoices and to categorize the expenses to the balance sheet and chart of accounts.

 

like wize if that person is doing quarterly taxes, it could take as long as 8 to 12 hours to do the taxes, again making the price you are quoting very reasonable.

 

So roughly, I believe the price you are being quoted is very reasonable. Expensive would be 1250 dollars or more per year. IN the Fremont area the average hourly rate for CPA business services is between 74 and 125 dollars an hour.

 

In tyring to lower the rate talk to the referred CPA about what you can do to get a discount on his rate. Perhaps you are already doing it. Ask him for example: What if I use software like quickern or peach tree, and bring him the data files instead of paper.

 

If your book keeping software is compatible with his software, it will save him time and effort.

 

I do not know the level of service you are retaining, but ask him if you categorize the receipts ahead of time would that reduce the cost.

 

You can also negotiate by signing a long term retainer and asking him to charge based on a sliding scale commensurate with your gross or net revenues.

 

 

 

 

Customer: replied 8 years ago.
<p>Thanks for the answer.</p><p>But I am being confused with one of of your answers. You said, Expensive would be $1250 a year or higher. In my case, for the first 6 months I don't expect much selling and the total amount a year they ask is $1200(150x4 + 600). </p>
Expert:  Ed Johnson replied 8 years ago.

I did not quite get the amount you had. so then you would be paying a bit much for your service.

 

I though you ment 150 a quarter which would be 600.

 

bu you are still below 1250 dollars. So you are 50 dollar a year below where I draw the line for expensive, is that right. So you are paying a bit more. You might get a better deal else where.

 

You asked how much you should pay for the service. I though you were about right but that you should not pay for more than 1250 a year. (1250 or more would be expensive).

 

remember, my expectation of what is expensive is based not on business sales, but on what I would expect to pay a CPA.

 

You might do better with hiring a book keeper who is not a CPA. Their fees are generally about half of that of a CPA.

Ed Johnson and other Tax Specialists are ready to help you
Customer: replied 8 years ago.
Thanks
Expert:  Ed Johnson replied 8 years ago.
You are welcome, best of luck.