Is $1200 a reasonable fee for tax preparation with real estate investments and K1?

I'm completely lost on what's considered fair pricing for tax preparation. A tax accountant just quoted me $1200 to file my taxes, and I'm honestly shocked. For comparison, my friend pays only $350 to his accountant, and he's actually doing way better financially than I am! I do have two real estate investment properties and a K1 to deal with, but there's barely any activity with them this year - it's mostly just entering the numbers from the forms. My friend probably has more complicated finances than me, so I'm struggling to understand why I'm being quoted over three times what he pays. Am I being taken advantage of here? What's a reasonable price range for someone with a couple of investment properties and a K1 with minimal activity? Feeling kinda lost about whether I should shop around more or if this is actually normal pricing...

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19 comments

Diego Rojas

•8M

Tax preparer here! The price difference could definitely be due to how the accountants structure their fees. Some tax pros charge based on the number of forms, while others charge by the hour or have a flat fee based on complexity categories. Real estate investments and K1s do add complexity even if there's minimal activity. Each requires additional schedules and understanding of specific tax treatments. That said, $1200 does seem on the higher end if there's truly minimal activity and straightforward reporting. I'd recommend asking the accountant to break down their fee structure so you understand what you're paying for. Also, it's possible your friend has been with his accountant for years (loyalty discount) or has a simpler tax situation than you realize.

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Diego Rojas

•8M

Many accountants charge per form regardless of the complexity of what's on that form. It's somewhat like a menu pricing system - each Schedule E might cost $150, each K1 might be $100, etc. This is because we still have to review the forms, understand the entity structure, and take liability for the accuracy even if there's minimal activity. Some accountants do adjust their pricing based on the actual time spent, but many use form-based pricing because it's more predictable for both parties. Your friend might not have these additional forms at all, which would explain the price difference.

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StarSeeker

•8M

I was in this exact situation last year and found https://taxr.ai super helpful. I was quoted $900+ by local accountants just because I had a couple rental properties, even though they were basically inactive while I renovated. The AI system analyzed my previous returns and all my documents, then walked me through everything step by step. It specially helped with the property depreciation calculations that I always messed up. Ended up saving me hundreds compared to what accountants were charging.

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StarSeeker

•8M

It handles K1 forms really well actually. You just upload the document and it extracts all the relevant information and tells you exactly where each number needs to go. It even explains which boxes you need to pay attention to based on your specific situation. As for passive activity limitations and at-risk rules, I was surprised by how comprehensive it was. It asks targeted questions about your level of involvement with each property and guides you through calculating your deduction limitations. It even flagged a potential issue with my at-risk basis that I hadn't considered.

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Sean O'Donnell

•8M

Wanted to follow up after trying taxr.ai that was mentioned earlier. I was super hesitant because my taxes aren't simple, but wow it saved me a ton of cash! I uploaded my K1 and rental property docs and it guided me through everything. Even caught a depreciation error from my previous return that my old accountant missed. Ended up paying way less than that $1200 quote you mentioned and learned a lot about my own tax situation in the process. Definitely worth checking out if you're on the fence!

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Luca Esposito

•8M

If you're still struggling to make a decision, I'd suggest calling the IRS directly to ask about typical fees or even get free tax help. I used https://claimyr.com to get through to an actual person at the IRS when I had questions about my rental property reporting. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically skips the hold times that can be hours long. Got connected to someone who explained exactly what forms I needed and what was reasonable to pay for preparation.

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Luca Esposito

•8M

Yes, it absolutely works! The IRS phone system is notorious for long waits and disconnections, but this service uses an automated system to navigate the phone tree and wait on hold for you. When an agent finally picks up, you get a call connecting you directly to them. The IRS won't specifically tell you what to pay an accountant, you're right about that. But they can tell you which forms are required for your situation, which helps you understand the complexity level. This gives you context to evaluate whether the quoted price seems reasonable based on the work involved.

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Mateo Rodriguez

•8M

I need to follow up on my skeptical comment about Claimyr. I reluctantly tried it after continuing to get nowhere with the IRS directly. Not gonna lie, I was shocked when my phone rang and there was an actual IRS agent on the line! Explained my situation with some rental properties and K1 issues, and while they didn't give me specific pricing advice (as expected), they did clarify which schedules were needed. Armed with that info, I went back to three accountants for quotes and realized the $1200 quote wasn't outrageous given the forms required, but I did find someone qualified for $850. The service literally saved me hours of frustration and ultimately $350.

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GalaxyGuardian

•8M

There can definitely be a quality difference, though not always. The $350 preparer might be missing key deductions specific to real estate or might not be as thorough in record-keeping, which could cost you in an audit. A good tax professional doesn't just enter numbers - they should be advising you on strategies to minimize taxes for the following year too. That said, don't just pay more assuming it means better service. Interview a few preparers, ask about their experience with real estate specifically, and see who gives you the most thoughtful answers rather than just quoting a price.

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Layla Mendes

•1M

I'm dealing with a similar situation right now! Just got quoted $950 for my return which includes one rental property and a K1 from a partnership investment. What really helped me was asking the accountant to break down exactly what they'd be doing - turns out they include a consultation about tax planning for next year and will handle any IRS correspondence if issues come up. When I compared that to cheaper options, some were just basic preparation with no ongoing support. I ended up negotiating down to $800 by agreeing to have all my documents organized digitally beforehand. Maybe try asking your accountant what's included in that $1200 and see if there's any flexibility based on how prepared your paperwork is?

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