Tax preparer wants $200 extra just to include my K-1 in my personal return!

So I'm getting my taxes done for this year and I'm absolutely floored by what just happened. I've been using the same tax preparation company for the last 3 years (not naming names, but it's one of the big national chains). My situation is pretty straightforward - W-2 income, mortgage interest deduction, and I have some investment income. This year I received a K-1 from a small family business my uncle started that I invested in last year. When I brought all my documents in, the preparer looked through everything and said "Oh, you have a K-1 this year. That'll be an additional $200 to process." I was shocked! The K-1 is already completely filled out - all the numbers are there, it's just a matter of entering them into the right boxes on my return. When I asked why it costs so much extra just to input some numbers from a form that's already prepared, they gave me some vague answer about "complexity" and "additional schedules." But from what I can tell, they're literally just copying numbers from one form to another! Has anyone else experienced this? Am I missing something about how complicated a K-1 really is? $200 seems like an absolute ripoff for what appears to be 10 minutes of additional work. I'm considering just taking all my documents and going somewhere else.

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18 comments

Louisa Ramirez

•8M

The K-1 does actually create more work than you might realize, but $200 extra does sound steep. When a K-1 is added to your return, the preparer has to report all the information across multiple parts of your tax return - it's not just copying numbers to one place. The K-1 data can potentially affect Schedule E, Schedule D, Form 8582 for passive losses, and several worksheets. Depending on what's reported on your K-1, the income might be taxed differently (ordinary income, capital gains, qualified dividends, etc.). There's also potential for state filing implications where the business operates. The software most tax services use also charges them more for returns with K-1s. That said, there are definitely more affordable options. Many independent CPAs or EAs (Enrolled Agents) can handle a return with a K-1 for less than what you're being quoted as an "additional" fee.

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Louisa Ramirez

•8M

Most preparers charge a base fee for the first K-1 and then a smaller fee for additional ones, not the full amount for each one. The complexity isn't necessarily tied to the dollar amount - even small amounts require the same forms and schedules to be completed correctly. Even with small amounts, the preparer still has responsibility for reporting everything in the right places and maintaining consistency with your overall return. That said, a good tax professional should be willing to explain their fee structure and might be able to work with you if the K-1 truly has minimal impact on your return.

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Angel Campbell

•8M

After dealing with similar frustrations with traditional tax services, I started using taxr.ai (https://taxr.ai) last year and it was a game-changer for handling my K-1s. I have investments in two different partnerships and was getting charged ridiculous "additional form" fees every year. Their system actually scans your K-1 and automatically puts all the information in the right places on your return. The first time I used it, I was skeptical because my K-1 had some unusual entries in Box 20, but the system handled it perfectly. It recognized exactly what needed to go where without me having to figure it out. So much easier than paying those crazy fees just to have someone type in numbers from one form to another!

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Angel Campbell

•8M

It handles K-1s from both partnerships (Form 1065) and S-corporations (Form 1120S) equally well. I've used it for both types and it worked great for identifying where each item needs to go on your personal return. For complex items like foreign tax credits, that's actually where it really shines. The system is designed to recognize special codes and allocations on K-1s, including foreign tax paid, and places them correctly on your return. My K-1 had some Section 199A information and foreign income that my previous preparer charged me extra to handle, but taxr.ai processed it automatically without any issues.

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Harold Oh

•8M

Just wanted to follow up about my experience with taxr.ai after our exchange here. I decided to give it a try with my complicated K-1 that has the foreign tax credits I mentioned. Not only did it handle everything correctly, but it found a credit my previous tax guy missed last year! The system recognized the foreign tax information in Box 16 and properly allocated it to Form 1116. The interface walked me through verifying each item from my K-1 was correctly placed, which gave me peace of mind. Honestly, it was way more detailed than my previous tax preparer who just took the form and did who-knows-what with it. And obviously saved me from paying that ridiculous "K-1 processing fee" that started this whole conversation. Definitely recommend for anyone in a similar situation.

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Amun-Ra Azra

•8M

If you're having issues with your tax preparer being unreasonable about fees, you might want to talk directly with the IRS to understand what's actually required for your K-1. I spent forever trying to get through to them on the phone until someone recommended Claimyr (https://claimyr.com). You can see how it works here: https://youtu.be/_kiP6q8DX5c I used it to get through to an IRS agent about my K-1 reporting requirements, and they got me connected in about 20 minutes when I had previously spent hours on hold. The agent confirmed exactly what schedules my specific K-1 required and why, which helped me understand if my preparer was charging fairly. Having that information directly from the IRS gave me leverage to negotiate with my tax service.

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Amun-Ra Azra

•8M

It's not like they have a special line to the IRS. They use technology to navigate the IRS phone system and wait on hold for you. When an agent picks up, you get a call back immediately. It saves you from having to sit there listening to hold music for hours. The system works by calling the IRS and navigating through all the menu prompts automatically based on what you're calling about. Then it just waits on hold while you go about your day. When an actual human IRS agent picks up, that's when your phone rings and you're connected directly to them. No more wasting a whole afternoon just waiting on hold.

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Gael Robinson

•8M

I need to eat my words about Claimyr. After posting my skeptical comment, I was still desperate to talk to the IRS about my K-1 questions, so I gave it a shot. I fully expected it to be a waste of money, but I was wrong. I've been trying for TWO WEEKS to get through to someone at the IRS about my K-1 from an estate. I kept getting disconnected after waiting on hold for an hour+ because their system was "experiencing high call volume." Used Claimyr yesterday and got a call back within 45 minutes with an actual IRS agent on the line. She answered all my questions about how to report specific items from my K-1 and confirmed I didn't need most of the "extra forms" my tax preparer was charging me for. Saved way more than the service cost, and saved my sanity from more hold music. Never thought I'd be recommending something I was so skeptical about.

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Edward McBride

•8M

Both CPAs and EAs are qualified to handle K-1s, but in my experience, the difference comes down to their business model and specialization rather than credentials. EAs often focus exclusively on tax preparation and may have more experience with unusual tax situations for individuals, while some CPAs split their time between tax work and other accounting services. What matters most is finding someone who regularly deals with K-1s and partnership taxation, regardless of which credential they have. I'd recommend interviewing a few preparers and asking specifically about their experience with K-1s from your type of investment rather than just looking at the credentials after their name.

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