Level 5

Question

How to Justify/Understand REP Fees

Forum|Forum|3 years ago
January 23, 2023
2 replies
28 views

Folks:

I am an attorney who prepares a small number of returns for clients, for trusts that I administer, for gift taxes, and so on. I spend a great deal of money on the program plus REP fees each year. My fees are reasonable--neither much higher nor much lower than other tax preparers charge. But REP fees along generally consume between 15 and 30% of the total fee that I charge.

I imagine that the metrics work for folks who do a ton of returns, but I'm just wondering how folks think about these fees in the context of the smaller preparer. When REP fees of $90 or $150 for a single client exceed the cost of buying an off-the-shelf software program, I am having trouble wrapping my mind around why it costs what it does and whether I am doing something wrong!

M.

Lacerte Tax

This topic has been closed for replies.

George4Tacks

Level 15

Charge and hourly rate and add an "administrative" or "software" fee to cover the REP Fee.

If you go to court, do you charge for filing fees?

If the fees are more than "off the shelf" software, why don't you switch? [I think I know the answer, but I had to ask.]

Answers are easy. Questions are hard!

M

msindc1Author

Level 5

George:

My question wasn't meant just to be whining. I am genuinely curious about how people think about the fees. For example, what answer would YOU give to why you don't use off the shelf software?

As for going to court, not all courts charge filing fees but when a court charges a $40 fee to file a motion that would have cost the client $500 or $5,000 to draft, the "drag" that the filing fee imposes is modest.

Micah

George4Tacks

Level 15

Over my many years buying things I have learned that a really good tool can last many lifetimes and a really poor tool may only be good for one use. Lacerte is a tool that does the job I want done with minimal effort (most of the time) and I believe it is worth the extra cost to keep this very sharp tool. If you can find an "off the shelf" bit of tax software that makes you happy and does the job with minimal effort, then use it. Each time I try a new software, I long for the one that makes me really comfortable doing my job, i.e. Lacerte.

I have used a very early CCH software that was an abominable disaster. I currently use or play with ProConnect Tax, ProSeries and ProSystems FX, and Tax Act and yet I am still here with Lacerte. (Maybe I did drink the Kool-Aid!)

Answers are easy. Questions are hard!

G

GPCPA100

Level 2

Lacerte truly doesn't care. They keep on raising there REP fees for additional states. If you have a simple W-2 from another state with a few thousand dollars of income and you have to pay $82 now. Most software programs charge considerably less. I am happy to say this is my last year as I'm sick of paying a lot with little service. The program for 2024 still has issues like freezing every time it updates. I'm happy to say I will be going to either Drake or Ultra Tax next season as there is no one at intuit to talk too!!!

rbynaker

Level 13

@GPCPA100 wrote:

I'm happy to say I will be going to either Drake or Ultra Tax next season as there is no one at intuit to talk too!!!

If you do a lot of multi-state returns, I'd avoid Drake. In some cases it's a glorified typewriter (but as long as you know exactly what your state returns will look like, overrides are pretty easy.) They don't charge you per state but you might wish they did after spending an extra hour manually plugging all of the numbers into each other state return.

G

GPCPA100

Level 2

Thanks for the response and warning! Most likely I will go with Ultra Tax as it would still be a huge saving to what I'm paying now.

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