Is my CPA charging too much for filing Umbrella LLC?

Question

Hello Guys,

I have an umbrella LLC in neveda and I have 9 properties total that is included in this LLC. My CPA just billed me for $4650 for Tax preparation for management LLC. Isn’t this too much?

Thank you in advanced guys!!

Kory Reynolds · Answer

One guy billing at $300/hr prepared the whole return? That is a little odd. At a small firm that is partner level rates for the whole return, even at a regional firm this is senior manager/director level rates.

As others have stated, entirely depends on the little details, books and record keeping would have a major impact across 9 properties. Really averaging a little over an hour per property could certainly be reasonable depending on the circumstances.

Hourly billing can be tricky - I would inquire respectfully of what created the increase over the prior year. I personally like to break out my invoices accordingly - IE prior year billing adjusted for inflation, and then separate line items for anything new over the prior year - accounting for a numerous refi, new properties, significant bookkeeping required, cost seg, etc.

We are an hourly rate firm, but when I take on new work I always provide (and commit) to a range based on the circumstance presented, and then when the records arrive let them know if I anticipate any issues with that range. So it doesn't always need to be a surprise for hourly billing, in the end our time is worth something so hourly or fixed rate, it is built in.

Christopher Smith · Answer

Charges generally relate to the complexity level of the filing and the experience/qualifications of the practitioner.

Therefore it's a little difficult to gauge based upon the limited info you have provided.

Lance Lvovsky · Answer

@George Chung

Depends on number of factors such as how good are your financial records (balance sheet, income statement), how many state returns there are, just to name a couple of the factors in play.

Brian M Sweeney · Answer

Depends on the value add and the complexity of the situation. No one can answer this without knowing the whole story.

Account Closed · Answer

Agreed! I think it really depends on the complexity of the situation and what you exactly need. It wouldn't hurt to get another opinion from another CPA.

Natalie Kolodij · Answer

If they're all just held under a SMLLC in Nevada then then all goes on your personal 1040- if the holding entitity is a partnership then you have a more complicated filing where basis and balance sheet tracking comes into play.

So aside from 9 rentals what else was involved? If you also have a ton of stock sales, businesses, itemized deductions ect- that all comes into play.

Also consider states- How many different states are the 9 properties in? Any state with a property can create a new filing.

There's just a lot of " could bes"

Firms bill differently too.

I do an upfront price because I hated the "Oh surprise bill this happened to take me X number of hours" concept at most firms.

But many firms just bill based on time- so if you handed over a shoebox of receipts and they're billing $300 an hour to open mail, and sort documents...it adds up quickly.

Hope this helps!

Simon Collins · Answer

At $300/hr that’s only 15.5hours of work on a “Essentially”a 9 property return.

I think that’s pretty decent.

So about 2 full days of work. Depending on how well your books were kept that could have taken double that long.

If you handed everything over to him in a nice little package, accounting and books were flawless and he just had to drop the numbers in the return and submit it then I would think there was a problem....but when I used to do taxes that was rarely the case.

George Chung · Answer

@Patrick J.

I believe he compiles separate LLCs to the umbrella LLC and file a Signle LLC for the umbrella LLC. I might be wrong but that’s my understating. So 9 separate Properties that belongs to few different LLCs and one umbrella LLC owns all LLCs.

Christopher Smith · Answer

Ok well that helps a little. Honestly I would just ask him to explain his fee perhaps in the context of last year's much lower charge. Sometimes there can be novel or complex issues in a given year that require additional tax research. In any event, if he is honest he shouldn't mind explaining his fee.

Patrick J. · Answer

@George Chung

How do you file taxes for an umbrella llc?? What does that mean?? Is it a seperate tax return??

Is my CPA charging too much for filing Umbrella LLC?

Is my CPA charging too much for filing Umbrella LLC?

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