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FAQ: 2023 Client Retainers & Tax Prep Fees

Updated: Jan 11


Engagement Letters & Retainer Payments

As CPAs, we must have signed engagement letters before all engagements therefore we kindly ask you to sign the attached terms document. 

Starting in 2022, we initiated a policy of requesting a retainer before the beginning of any engagement. Henceforth, we are making it a requirement for all clients to prepay our fees before we commence any work.  


Projected Total Cost of Engagement

This proposal contains the projected cost of your tax engagement. However, your tax return engagement fees could higher than projected if you have new items or items that require special attention. The following items could lead to a higher fee than projected:

  • New business or self-employment income

  • New rental property

  • New home office setup

  • New stock/brokerage accounts

  • New K-1s

  • Changes you make to the return after we have sent it to you to review

  • Incomplete real estate or stock basis records upon sale

  • Out-of-state exposure triggering state income tax returns

  • Sale of rental or homestead property

  • Sale of business assets

  • Cash-out refinance /home equity loan with interest tracing

If your return has any 'items requiring special attention' they will be billed at the conclusion of the engagement. 


Q: Is this retainer payment in addition to my tax preparation bill? No, we will apply this retainer payment to your final tax preparation bill. We will bill the remaining balance, if any, at the completion of the engagement.


Q: How was my projected tax return fee calculated?

Your projected tax return fee is based on your prior year's tax return with a roughly 8%-12% increase to cover our firm's increased cost of labor, technology, and cyber-security costs.


Q: Why are my retainer and projected tax preparation bill the same amount?

For engagements under $1,000, we are requesting a retainer in the amount equal to your projected tax return preparation fee.


In prior years, we requested about 70% of the retainer at the beginning of the engagement and billed the remainder at the end of the engagement.


This was somewhat confusing to clients and created a lot of extra work for our A/R department.


Clients with engagements of $1,000 or greater have received retainer requests in the amount of 70% of their projected final tax preparation bill. The remainder will be billed at the end of the engagement.


Q: Can I pay my retainer in installments?

Yes; if you want to break your retainer into three monthly installments, please call Sam with your bank information. We will set up an auto-draft of your bank account.



Q: What if my return was less complicated in 2022 than in 2021?

A lot of things can impact your final tax preparation invoice and we don't know how much more or less complex your return is until we do the actual work.


With that in mind, if your return had less activity in 2022 than in 2021, then you can expect to have a credit balance refunded or applied to future tax preparation work.


Q: What are some examples of things that lead to increased complexity on my tax returns?

  • New business or self-employment income

  • New rental property

  • New home office setup

  • New stock/brokerage accounts

  • New K-1s

  • Changes you make to the return after we have sent it to you to review

  • Incomplete real estate or stock basis records upon sale

  • Out of state exposure triggering state income tax returns

  • Sale of rental or homestead property

  • Sale of business assets

  • Cash-out refinance /home equity loan with interest tracing



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