On Schedule C’s and Setting Rates

ID-100109351According to research from the National Society of Accountants, the price for a Schedule C (sole proprietorship tax return) is $205.

My fee for a Schedule C starts at $50.

There’s a lot to say on fees (like … I will no longer tolerate people complaining about my fees after I’ve seen research like what I linked to above!) and I’ll fill up future blog posts with those thoughts.

But today, I’m writing about Schedule C.

Is the average price for preparing a Schedule C really $205? Or on this survey, did some firms respond with the total price for a Schedule C plus the accompanying 1040?

Other solo practitioners I have talked to charge nowhere near $200 for a Schedule C. Most are somewhere in the $60-75 range.

I do know that a competing CPA firm in my town charges $250 for a Schedule C, but that firm is aggressive with its pricing, and they have multiple layers of staff and partners, so they really aren’t comparable to a solo operator like me.

Pricing a Schedule C is Hard

Not all Schedule Cs are created equal.

My Schedule C clients range from:

  1. Side businesses of all sorts.
  2. Consultants (generally home-based) who make a lot of money but who have very little in the way of expenses, so their Schedule C is simple.
  3. Independent contractors, such as salesmen, who are treated as a contractor but who work for one company exclusively and who have no expenses other than mileage, so again, their Schedule C is simple.
  4. A few “main street” type of businesses that have a complex Schedule C — but once a sole proprietorship grows into this stage, they usually incorporate, so I don’t have too many Schedule Cs in this category.

These things make it hard to pin down an exact fee for a Schedule C. I can’t really charge the same for someone in #1 as in #4. And the folks in #3 are not really “business owners,” they’re just poor sods who are being treated as contractors and have no choice but to file a Schedule C.

A lot of times I’ll bill people in #1 and #3 at my Schedule C-EZ price ($25 … yes, I know that’s ridiculously low).

I’ll keep the fee at $50 for #2 and #4, and usually they have other things, such as the home-office deduction and depreciation schedules, that push the fee up higher.

The point, I guess, is that when you’re a solo operator like me, it’s hard to set rates, and even harder to stick to those rates. By far the hardest thing I grapple with is the question of “what to charge.”

More to come in future blog posts.

Image courtesy of adamr / www.freedigitalphotos.net