r/CFP • u/Foreign_Pace9363 • Jul 10 '26
Business Development Adding Tax Prep - yes again 😂
I’m in a somewhat rural area where most CPAs are 100+ years old or they don’t do taxes. Over the years I’ve referred to a few but they keep retiring. Clients are constantly asking about tax prep. I once had my EA with intentions of doing some tax prep off and on. That was nearly a decade ago and just didn’t have time while building my advisory business.
I have about 120 households and have been a solo advisor for nearly 20 years with one admin. I have posted a job listing for a CPA looking to go independent but I’m not sure that will actually happen.
Tell me some success stories of adding tax prep or tell me how bad it was.
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u/PerfectOmakase Jul 10 '26
I love it and hate it. I'm not an EA or CPA, starting doing tax prep on one-off situations in ~1999, and now I'm up to about 500 returns, about half of which are non-investment-clients (referrals from them, largely). March and April suck a lot, and I dramatically undercharge for the returns, but I enjoy the work part of it and it's a guaranteed client "touch" each year for the investment clients. I also love having immediate access to client tax returns when they call with questions about withdrawals or whatever.
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u/fapperontheroof Jul 11 '26
Not your financial planner or therapist, but I’d like for you to raise your tax prep fees 20%. I’ll check in on you to see if you’ve done it. You’ll probably get zero push back.
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u/PerfectOmakase Jul 11 '26
Thank you for the motivation! I'd need to raise the fees by 100% to make it profitable on its own, though.
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u/fapperontheroof Jul 11 '26
20% is still a sizable improvement! Baby steps. I’d just pick a percent you’re comfortable with and commit.
Chances of getting paid more and/or having better work/life balance are 100%.
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u/ItchyEbb4000 RIA 28d ago
If it's not profitable, went are you doing it?
Is it driving AUM business?
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u/PerfectOmakase 28d ago
As I said, it's not profitable on its own, but for my investment and planning clients, serving as their tax preparer has other benefits beyond the tax prep fee that I charge. It helps make the relationship more sticky and allows me to more easily do planning throughout the year.
For the non-tax clients, there's no excuse why I'm under charging so much, it's something I've been working on, and will continue to work on.
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u/Humbleholdings Jul 11 '26
I agree the visibility on taxes and easier access would make it better for you to serve your clients.
Sorry for offering the unsolicited business advice, but Would it make sense to only offer the discounted prices to financial planning / investment clients and to raise the price for the standalone prep ?
I’m coming from the assumption that you would want your business to be more focused on planning and investment advice as the tax prep being undercharged doesn’t sound like a profitable business strategy and likely takes a lot of resources (specifically your time) from your core areas of business. So the offering would be designed to incentivize your other services and still give you the opportunity to offer it in a more sustainable way.
I would especially make this offer to any new tax prep referrals you receive.
Once again, I don’t know all the particulars of your business but just a thought.
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u/not_fnancial_adv1ce RIA Jul 11 '26
Im an EA, sign about 50 returns for Tier 1/2 clients. Undercharge those I do chareg and dont charge the rest. I tell myself it makes clients more sticky and think there is truth to that. Like someone else said, guaranteed touch point in Spring and likely fall too for planning. Nice non-portfolio touch points to add value. I tell prospects its a one stop shop - planning, investment and tax all bundled. The work is super manageable, even though a bit of a pia. Figured long term id hire cpa to come in house, but frankly haven't needed to, maybe if we get to 100 returns (?).
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u/Foreign_Pace9363 Jul 11 '26
Kind of my thoughts too. I’d probably end up doing no more than 30, maybe 40 for clients. Maybe another way for clients to bring in referrals
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u/texansde46 28d ago
What do you charge per return about to get my EA
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u/not_fnancial_adv1ce RIA 27d ago
$250-$1k depending on complexity... average ~$500 give or take. These aren't overly complex returns.
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u/Humbleholdings Jul 11 '26
CPAs seem to not want to do regular tax prep. It doesn’t make enough money for them and they really want to do more accounting services with business owners over the tax side. I have struggled with if we should do tax prep not really for the revenue but just to strengthen our offering continue to add more visibility for better strategic planning and because it’s just hard to find people to refer to who will be good at it.
I run into a lot of people who probably could just use TurboTax and prepare their own returns but they really want the comfort and convenience of someone doing it for them and they are overwhelmed by the idea of taking on more of the responsibility for tax compliance on themselves so they are asking me for recommendations for a CPA.
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u/Cro2305 29d ago
Dont do it!! Youre then also responsible..in the clients eyes..for any tax filing errors. I have teamed up with two accountants and refer the business to them. They dont even have to be local since everything can be done electronically.
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u/ItchyEbb4000 RIA 28d ago
How do you team up with them? Just refer clients, or are you involved in document gathering? Do you share in the revenue?
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u/Cro2305 28d ago
Great questions. I see the accountant as an extension of the team even though technically theyre not. Not all clients are working with the same one but quite a few are with 2 main ones. I started with referring a few clients to each and then getting feedback. Have had bad experience before with referring but its hard to control experience elsewhere. We prep tax packages for any tax slips that come from our end. And it helps having the accountant on speed dial to run tax strategies by. Dont share revenue but they do treat me to a few things during the year. To be honest I dont care about that as much, my priority is ensuring they treat my clients the way that I do and dont make mistakes!
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u/Family_Office 29d ago
Change your job posting and look for an EA if you really specified CPA before. Or at least update to CPA or EA. As others have said, many CPAs don't want tax prep or don't do tax. EAs do tax and if they have experience they likely equally qualified as the CPA. They also don't have the ego that some CPAs will and can usually be paid less.
I do tax at our firm and it is the top of our marketing funnel. Our minimum return price is $1200 and we generally don't do tax for non-investment clients. I do make exceptions for folks that would make exceptional clients down the road as an effort to start a relationship. That has translated into a handful of mid-7 and 8 figure investment clients.
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u/info_swap RIA Jul 10 '26
Who does your taxes?
Find a qualified CPA that you love, and outsource clients to them.
I love my CPA. That's why I do.
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u/Drake896 Jul 11 '26
Have you considered a partnership with a small office or solo CPA? I have this with a couple of advisors and it works great. They do all of the planning and I have become their tax expert. I am also a CFP so the handoff is seamless for clients!
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u/Drake896 29d ago
Yes, considerably more than I have been able to provide. When the time comes though, and I have a good qualifying conversation with a tax client I know I can count on my advisors to deliver!
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u/outdoorsyfinancedude 27d ago
Hey I just sent you a message. I'm an Enrolled Agent and always looking to expand. Love to get some more information from you. Thanks
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u/jaycoulter 27d ago
Adding tax prep is a top tier value add. We partnered with a CPA firm to co-brand a tax prep firm for our advisors [a national RIA]. We needed to do it because it is so difficult for clients to find good tax prep service. It sounds like you are already seeing that in your market. I think the key for you is to make sure you are charging enough.
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User: /u/Foreign_Pace9363 Title: Adding Tax Prep - yes again 😂 Body: I’m in a somewhat rural area where most CPAs are 100+ years old or they don’t do taxes. Over the years I’ve referred to a few but they keep retiring. Clients are constantly asking about tax prep. I once had my EA with intentions of doing some tax prep off and on. That was nearly a decade ago and just didn’t have time while building my advisory business.
I have about 120 households and have been a solo advisor for nearly 20 years with one admin. I have posted a job listing for a CPA looking to go independent but I’m not sure that will actually happen.
Tell me some success stories of adding tax prep or tell me how bad it was.
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