The Tax Pro’s Guide to Pricing Like a Pro: Straight from the Coach’s Mouth

Let’s huddle up! It’s time we had a serious talk about pricing your services. I often get comments from tax pros that one of their biggest downfalls is not charging enough for their services. I get it. I was there once as well. When I first opened my firm, I was charging low fees. Then I started working with a coach, another licensed tax pro who has been there, and he helped me see that I could do more and be more than I thought I was. With that, I put this together to help you achieve more by charging more.

You’ve put in the hard work to become licensed professionals, mastering the complexities of tax law and IRS procedures. You have spent countless hours rubbing elbows and schmoozing at events and NOW it’s time to make sure you’re getting paid what you’re worth. Let’s break down how to price your services for all of the various services you provide and while we are at it, I want to pump up your confidence to charge what you deserve.

Now, I know some of you might be thinking, “Coach, those rates seem high. I’m not sure I can charge that much.” Listen up, because this is important: You are a professional with specialized knowledge and skills. You have the power to significantly impact your clients’ financial lives. It’s time to start seeing yourself the way your clients see you – as an expert they can trust. Oh, and if you are a book author, have a YouTube channel, become a speaker, and/or have a podcast, this can elevate your authority (and along with it your value). Please don’t sell yourself short.

Here are some tips to boost your confidence:

1. Celebrate your wins. Every successful resolution, every audit navigated, every tax return that saves your client money – these are victories. Acknowledge them and let them fuel your confidence.
2. Continuously educate yourself. The more you know, the more confident you’ll feel in your abilities. Stay up-to-date on tax law changes, tips and tricks and best practices.
3. Network with other professionals. Surrounding yourself with successful peers can help you see what’s possible and give you the courage to raise your own standards.
4. Focus on the value you provide. Don’t think about the hourly rate – think about the peace of mind, financial savings, and expert guidance you’re offering your clients. (i.e. the benefits of what you offer your clients)
5. Practice positive self-talk. Replace thoughts like “I’m not sure I’m worth that much” with “I am a skilled professional providing valuable services.”
6. Ask for reviews and testimonials from successful cases. Nothing pumps up your head than seeing the success through the eyes of others that you have impacted.

DO:
• Know your value. You’ve invested time, money, and effort into your education and licensing. Your expertise is valuable – price it accordingly.
• Research your market. Understand what other professionals in your area are charging for similar services. This gives you a baseline to work from. But please don’t charge what they charge, charge your value.
• Consider your overhead costs (both fixed and variable). Factor in office expenses, software, continuing education, and other business costs when setting your rates. Don’t forget one of the most valuable investments you will make in your practice, investing in others. Whether they are employees, contractors, virtual assistants, temporary or part-time, these people will help take the load off of you and allow you to charge more for your time than doing administrative tasks or preparation of returns or 433s.
• Offer tiered pricing options. Give clients choices that fit different budgets while still valuing your time appropriately. This could be offering the Gold, Silver, Bronze type of packages. But remember, the package is the package. Don’t charge less for a package because someone won’t use a particular service. Do you do that with the gym you belong to and don’t use everything they offer or with CostCo/Sam’s or Amazon. No, you don’t. Then you shouldn’t either.
• Regularly review and adjust your pricing. As you gain experience and expertise, your rates should reflect that growth. Remember your costs increase every year and inflation is at least 2-4 percent in most years. Your employees want raises (as do you) and I know for certain that your tax software and other software services increase almost every year, if not every year.

DON’T:
• Undervalue yourself. Low-balling your prices doesn’t just hurt you – it devalues the entire profession.
• Try to be the cheapest option. Compete on quality and expertise, not price.
• Be afraid to turn down work that doesn’t meet your minimum fee. Your time is valuable – use it wisely.
• Neglect to explain the value you provide. Help clients understand why your services are worth the investment.
• Feel guilty about raising your rates. As your skills improve, so should your compensation.

Now, let’s break down pricing for specific services:

This is high-stakes work, team. You’re going toe-to-toe with the IRS to protect your clients’ assets and livelihoods. Your pricing should reflect the complexity and importance of this service.  Consider a value based flat fee for this type of work. Remember, you’re not just filling out forms – you’re leveraging your expertise to navigate a complex system and achieve the best possible outcome for your client. You take the time to attend CPE classes (that sometimes aren’t cheap), have various software to help you with calculations and analysis (oh, and some pretty reports), as well as paying for a membership in a great group like the Tax Resolution Academy®, that help you with tools, resources and ask those difficult questions because you don’t have anyone else in your office to ask.

 

IRS Exam (Audit) Representation

When the IRS comes knocking, your clients need a pro in their corner. Your knowledge and experience can mean the difference between a manageable outcome and financial disaster. For audits, it is best to charge an hourly rate as these cases can, unfortunately, drag on for months. But don’t sell yourself short as you can (and should) be charging a much higher hourly rate than you do for just about any other service you provide. This is also a specialized knowledge that you first learn from others, but gain a world of knowledge from the school of hard knocks. Don’t forget to factor in the time spent preparing for the audit, not just the face-to-face meetings with the client and IRS. Don’t forget to get a starting retainer of at least $3-5k to start with and never let this balance go below zero.

 

Tax Preparation

This is the bread and butter for most tax professionals. But too many tax pros undervalue this critical service. Remember, you’re not just plugging numbers into software – you’re applying your expertise to ensure accuracy and maximize benefits for your clients. If you are a licensed tax professional, you should never, I mean NEVER, be charging less than those corner box stores that do tax prep. In fact, I can make the argument that you can and should be charging like the large local firms. What do they have that you don’t? Extra staff and resources, but that does not make your knowledge and experience any less valuable than theirs.  Don’t be afraid to charge more for rush jobs or last-minute filers – your time becomes even more valuable as deadlines approach. I always charges a RUSH fee that was at least $500 or 50% of the prep fee if they brought in information within two weeks of a deadline. This is a great motivator to get stuff in earlier. Remember, it is your practice, you control everything in it.

Remember, team, when you undervalue yourself, you’re doing a disservice not just to yourself (and your family), but to your clients and the entire profession. By charging what you’re worth, you’re able to invest more time and resources into each client, providing better service and achieving better outcomes. You’ve put in the hard work to get where you are. You’ve studied, you’ve practiced, you’ve honed your skills. Now it’s time to step up and claim your rightful place as a top-tier professional. Your clients need your expertise, and they’re willing to pay for it. Don’t shortchange yourself or them by offering discount-store prices for premiere services. Every time you sit across from a client or pick up that phone to deal with the IRS, I want you to remember this: You are a trained professional. You have knowledge and skills that most people don’t. You are your client’s best hope for navigating the complex world of taxes and IRS procedures. Charge accordingly, and hold your head high knowing that you’re worth every penny. Now get out there and show the world what you’re made of! It’s time to turn those tax forms into touchdown passes and those IRS negotiations into game-winning plays. You’ve got this, team – now go make it happen!