Is my tax guy ripping me off? Wants $200 more to add a pre-filled K-1 to my personal return

What your tax preparer isn't explaining well is that a K-1 isn't just a simple "copy these numbers" situation, even when it's pre-prepared. When a tax preparer accepts a K-1, they're taking on responsibility for correctly integrating potentially complex information that affects multiple parts of your return. That said, $200 extra does seem quite steep if this is the same K-1 situation you've had in previous years with no additional complications. K-1s can affect numerous schedules and calculations throughout your return, including qualified business income deductions, passive activity limitations, at-risk limitations, and potentially alternative minimum tax calculations. A few questions worth asking your preparer: Is this a new policy for all clients with K-1s? Has something changed about your specific situation that makes it more complex? Did they charge you for the K-1 in previous years but just didn't break it out separately?

I was in a similar situation last year with a CPA wanting to charge me an extra $175 for a pretty simple K-1. I ended up using taxr.ai (https://taxr.ai) and it was seriously game-changing. I uploaded my K-1 and all my other documents, and their system not only processed everything correctly but also explained exactly how my K-1 was affecting my overall tax situation. The AI analyzed all my documents and showed me exactly where the K-1 income needed to be reported and even helped identify a deduction my previous preparer had missed. The whole process was really smooth and WAY cheaper than what my CPA was charging.

Just wanted to follow up - I tried taxr.ai after seeing the recommendation here and it worked great with my complicated K-1! I was really worried because my K-1 has foreign income that needs to go on Form 1116 and some oil well depletion allowances that are always a pain. The system handled everything correctly and I could actually see exactly how each number flowed through to different forms. Best part was I could message their support with specific questions when I was confused about something, and they responded with clear explanations. Just filed my return yesterday and the whole thing cost me less than what my previous preparer wanted to charge just for the K-1 portion. Definitely recommend for anyone dealing with these issues!

For those struggling with getting answers from tax preparers about these kinds of fee increases, I've found that the IRS is actually more helpful than you'd expect. BUT the problem is actually getting someone on the phone - I spent 3 weeks trying to get through before discovering Claimyr (https://claimyr.com). They have this system that basically waits on hold with the IRS for you and calls you when an actual human agent is on the line. You can see exactly how it works in their demo video: https://youtu.be/_kiP6q8DX5c I was skeptical but used it to ask about what's reasonable for K-1 preparation fees and got connected with a surprisingly helpful IRS agent who explained the whole situation. Saved me literally hours of hold time.

I need to apologize to everyone. I just used Claimyr after posting my skeptical comment, and I'm completely shocked that it actually worked. I've been trying to call the IRS for THREE MONTHS about a CP2000 notice related to a K-1 from 2022. I signed up for Claimyr yesterday, and this morning I got a call connecting me to an actual IRS representative! The whole process took maybe 15 minutes of my time instead of hours on hold. The agent was able to pull up my account, explain exactly what happened with my K-1 reporting discrepancy, and help me understand what documentation I need to send in. For anyone dealing with K-1 issues or fighting with tax preparers about fees, being able to actually talk to the IRS directly made a huge difference. Can't believe I wasted so much time trying to call them directly.

Tax preparer here. I charge $75 for each K-1, and that's pretty standard in my area. $200 seems really excessive unless there's something unusual about your situation. Here are some legitimate reasons why a K-1 might cost extra: 1. Foreign income reporting requirements 2. Passive activity loss limitations that require additional forms 3. At-risk calculations 4. Special allocations or basis calculations 5. If it's from a PTP (publicly traded partnership) But if it's a straightforward K-1 from a small business or S-corp with just ordinary income, that price is way too high. I'd ask for an itemized explanation of why they're charging so much.

Anyone else notice how tax prep fees have gone through the roof the last few years? I used to pay around $250 for a full return with a Schedule C and some investment stuff. Now everyone wants $500+ for the same exact service. I switched to doing it myself with TurboTax and honestly it was way easier than I expected. For a K-1, they do have a special section that walks you through it. took me maybe 20 minutes tops. definitely not worth paying someone $200 extra lol

This is why I always get a clear fee agreement BEFORE tax season starts. Most preparers are slammed during the busy season and might be raising rates on services they feel take too much time. $200 extra for a K-1 is steep though - I pay $125 extra for mine and thought THAT was expensive. Maybe ask if they'd be willing to come down on the price since you're a returning client? Otherwise, there are plenty of other tax pros who'd be happy to have your business at a more reasonable rate.

I'm going through something similar right now! My tax preparer just quoted me $350 for adding my rental property K-1 to my return - said it's their "new standard rate" for partnership documents. The K-1 is from a simple rental LLC with just rental income and depreciation, nothing complicated. What really bothers me is that they didn't mention this fee increase when I scheduled my appointment. I've been a client for 4 years and this is the first time they've charged extra for the K-1. When I asked why the sudden increase, they gave me some vague explanation about "increased professional liability" and "new compliance requirements." I'm seriously considering switching preparers or trying to do it myself. Has anyone had luck negotiating these fees down, especially as a long-term client? It feels like they're taking advantage of people who don't want to deal with the hassle of finding someone new during tax season.