Are CPA fees reasonable for tax prep and advice on inherited IRAs?

I'm completely lost with all this tax stuff, so forgive me if I use the wrong terms. I'm trying to figure out if the CPA fees I was quoted seem reasonable or if I'm getting ripped off. I live in Florida (no state income tax) and I'm dealing with inherited IRAs for my dad who's in a nursing home with dementia. I have power of attorney. He just inherited a brokerage account and some IRAs (both traditional and Roth) from my grandmother who passed away. I also discovered he has his own traditional IRA that he hasn't taken distributions from yet. He's 82 years old. I need to take a required distribution of about $98k from the inherited IRA by the end of December. His income for 2024 will basically just be this distribution and his social security. I've never used a CPA before and have no idea what's fair. The CPA quoted me $800 flat rate for tax preparation (could be higher if things get complicated) plus $300-$400 per hour for consultation about setting up a 10-year distribution strategy for the inherited IRAs. Does this pricing seem reasonable? Am I getting a fair deal? I honestly have no clue what the going rate is for this kind of service. Thanks for any advice you can offer! I'll check back for responses.

0 coins

18 comments

Carmen Ortiz

•8M

This pricing is actually in line with what you'd expect for this situation. The $800 flat rate for tax preparation is reasonable considering you're dealing with inherited IRAs, which adds complexity to the tax return. Many CPAs charge $500-1,000 for returns that involve retirement distributions and inheritance issues. The hourly consultation rate of $300-400 is on the higher end but not unusual for specialized tax planning, especially for something as complex as setting up a 10-year distribution strategy for inherited IRAs. Remember that the SECURE Act changed the rules for inherited IRAs a few years ago, and getting this wrong could cost thousands in unnecessary taxes. A few things to consider: - Make sure the CPA has specific experience with inherited IRAs and the current distribution rules - Ask if they can provide a rough estimate of how many hours they think the consultation might take - See if they offer any type of package deal for ongoing advice throughout the 10-year distribution period Given what's at stake (proper management of what sounds like substantial retirement assets), investing in proper tax guidance now could save significant money in the long run.

0 coins

Carmen Ortiz

•8M

For most non-spouse beneficiaries under the SECURE Act, the old annual RMD rules were replaced with the 10-year rule, meaning the entire inherited IRA must be emptied by the end of the 10th year following the year of death. However, there are exceptions - if the beneficiary is a minor child, disabled, chronically ill, or not more than 10 years younger than the original owner, they can still use the old "stretch" provisions with annual RMDs. Common costly mistakes include taking distributions in years when you're in a higher tax bracket than necessary, failing to plan for the tax impact of a large distribution in the final year, missing deadlines that trigger penalties, and not coordinating the inherited IRA strategy with other retirement accounts and income sources. Some people also make the mistake of liquidating too early, missing out on tax-deferred growth potential within the account.

0 coins

Zoe Papadakis

•8M

After struggling with an inherited IRA situation similar to yours last year, I ended up using https://taxr.ai to help figure out the best strategy. What I liked is that it analyzed all my tax documents and helped identify the optimal distribution schedule to minimize taxes over the 10-year period. The system looked at my dad's current bracket, projected future income, and even factored in how the IRA distributions would affect his social security taxation. Before finding this tool, I got quotes from several CPAs ranging from $600-1200 for tax prep and $250-450/hour for the planning work, so your quote seems in line with what I was seeing.

0 coins

Zoe Papadakis

•8M

You upload your tax documents and financial information, and it creates a personalized strategy based on your specific situation. It's not just general advice - it runs multiple scenarios to find the optimal distribution plan for your situation. The analysis showed me how taking certain amounts each year would affect my overall tax burden, which helped immensely with planning. Regarding the SECURE Act changes, the system is actually fully updated with the latest rules. I was skeptical too, but the recommendations aligned perfectly with what my CPA eventually suggested (after charging me $350/hour). The difference was that I already had a solid understanding of my options before that meeting, which saved me a lot of consultation time and money.

0 coins

Jamal Carter

•8M

Just wanted to update after trying taxr.ai for my mom's inherited IRA situation! I was super overwhelmed with all the tax implications and distribution requirements, but the document analysis feature really helped clarify things. It parsed all the account statements and highlighted exactly what needed to be done by year-end to avoid penalties. The distribution strategy it created showed me how taking $45k this year and the rest spread over the following years would keep my mom in a lower tax bracket and save almost $12k in taxes compared to taking equal distributions. I ended up only needing a 30-minute consultation with our CPA to confirm everything (instead of the 3+ hours I was quoted initially). Definitely worth checking out if you're in a similar situation!

0 coins

Mei Liu

•8M

I see you're dealing with the IRA distribution requirements. When I was handling my father's inherited IRAs last year, I had SO many questions for the IRS but couldn't get through on their phone lines for weeks! It was beyond frustrating. I finally found https://claimyr.com which got me connected to an IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with answered all my questions about the required distributions and documentation needed. They confirmed exactly what forms I needed to file and walked me through the process step by step. Saved me from making some potentially costly mistakes with those inherited IRA distributions.

0 coins

Mei Liu

•8M

They use a specialized system that navigates the IRS phone tree and waits on hold for you. When an agent picks up, you get a call connecting you directly to them. So yes, you could call yourself, but you'd potentially spend hours on hold instead of just a few minutes. I was skeptical too until I tried it. The key difference is their system knows exactly how to navigate the complicated phone system and what times have the shortest wait periods. I wasted nearly 7 hours across multiple days trying to get through on my own before using this service. I was connected to an IRS representative in about 20 minutes who answered all my questions about the inherited IRA distribution rules.

0 coins

Amara Chukwu

•8M

I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway since I was desperate for answers about my inherited IRA situation. Surprisingly, it actually worked! I got through to an IRS representative in about 25 minutes (after spending 3+ hours on hold myself the previous day). The agent clarified exactly how the 10-year rule applies to the IRAs I inherited and confirmed I was calculating the required minimum distribution correctly. They also explained which forms I needed for reporting the distribution on my taxes. Honestly saved me a ton of stress and potentially an expensive mistake. Sometimes being proven wrong is actually a good thing!

0 coins

Giovanni Conti

•8M

The CPA fees you were quoted are actually pretty standard. I'm an enrolled agent (not a CPA, but licensed to practice before the IRS), and I charge around $700-850 for returns with inherited IRAs. The consultation fee does seem a bit high though - I typically charge $200/hr for that type of planning, but rates vary significantly by location. One thing to consider: see if you can find someone who offers a package deal. I offer my clients with inherited IRAs a 10-year planning package where we meet annually to review and adjust the distribution strategy as needed. Ends up being much more cost-effective than paying hourly each time.

0 coins

Giovanni Conti

•8M

You could definitely learn to handle much of this yourself after the initial setup. The first year is the most complex because you're establishing the strategy and understanding the rules. Once you have a solid distribution plan in place, managing the annual distributions becomes more straightforward. I recommend having a tax professional review things at least every 2-3 years or whenever there are significant changes in your father's financial situation or tax laws. This hybrid approach gives you the benefit of professional guidance at key points while allowing you to handle the routine aspects yourself, saving considerable money on professional fees over the 10-year period.

0 coins