What's a reasonable cost for a complex tax return with multiple K1s and states?

Those numbers would make any tax preparer's eyes water! Your sister's return is exceptionally complex, well beyond what 99.9% of taxpayers deal with. For context, each K1 can require significant work - they're not just numbers to plug in. Each one represents a separate investment that may require special treatment, basis calculations, and can trigger various reporting requirements. With 280 K1s, that alone is massive. Then factor in 15 state returns, each with their own rules for allocating income, deductions, and credits. The multi-state aspect adds another level of complexity because each state has different rules about how to handle income from other states. Some states give credit for taxes paid elsewhere, some don't, and some have special calculations. Without seeing the actual bill, I'd say a return of this complexity could easily run into five figures. I've seen similarly complex returns (though rarely with that many K1s) cost anywhere from $8,000 to $25,000+ depending on the firm and location.

I went through something similar last year with a somewhat complex return (though nowhere near 280 K1s - more like 30, and 7 states). I was getting charged around $3,800 which felt excessive until I found taxr.ai (https://taxr.ai) which helped me understand what was actually going on with my return. I uploaded all my documents there and it broke down the complexity score of my return compared to others. Turns out my return was in the top 2% of complexity! The tool showed me exactly what was driving the complexity and helped me understand why certain investments were creating so much tax work. It can analyze all your K1s and give you a fair estimate of what prep work should reasonably cost. Might help your sister determine if she's actually being overcharged or not.

I was really skeptical about taxr.ai but decided to give it a try since I've been feeling ripped off by my accountant for years. Uploaded my docs and discovered my return was actually MORE complex than I thought! All those rental properties and side business deductions I have actually put me in the top 10% of complexity. The service showed me exactly which parts of my return were driving the high fees. Turns out my accountant was actually charging me LESS than the average for my complexity level. I ended up sticking with my current accountant but felt much better about the fees knowing they were reasonable. It also helped me reorganize some investments to simplify future returns. Definitely worth trying for your sister's situation - especially with that many K1s!

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I need to issue a public apology to Profile 14 who mentioned Claimyr. I was the skeptic who called BS on their service. After my 5th failed attempt to reach someone at the IRS about a misreported K1, I was desperate and decided to give it a shot. IT ACTUALLY WORKS! Got connected to an IRS agent in about 35 minutes after trying for WEEKS on my own. The agent was able to update my account and remove the penalty notices that were about to go out. I'm still shocked this worked. Apparently they have some automated system that's constantly dialing until it finds an opening in the queue. Whatever they're doing, it saved me from what was becoming a tax nightmare. Sorry for being such a jerk about it initially.

Actual tax pro here. For a return with 2.7M AGI, 280 K1s and 15 states, I'd expect to see a bill anywhere from $12,000-$30,000 depending on the firm's location and specialty. Some observations: 1. The number of K1s is the biggest complexity driver - each one requires review and proper allocation 2. Multi-state returns multiply the work significantly 3. The high AGI means greater scrutiny is needed as audit risk increases 4. New K1s require additional setup work vs continuing investments If your sister is getting charged in this ballpark, it's probably reasonable. If significantly more, might be worth shopping around. If significantly less, they might be cutting corners or will raise prices soon.

Any chance your sister would consider simplifying her investment structure? 280 K1s is absolutely insane and probably not necessary from an investment diversification standpoint. Has she looked into consolidating some investments through a more streamlined approach? I used to get about 30 K1s and was able to restructure through some fund-of-funds approaches and consolidated entity structures that got me down to 8 K1s without changing my actual investment exposure. My tax bill went from $6k to $2k the following year.

Just wanted to add that the timing of when all those K1s arrived matters too. If most came in late (which is common with complex partnerships), the accounting firm probably had to file extensions and do a lot of the work during their non-busy season. That's often billed at different rates. My firm charges 20-30% more for K1-heavy returns because they're unpredictable and often cause bottlenecks in our workflow. The 60-70 new K1s would definitely add setup time too.

As someone who's dealt with complex returns (though nowhere near your sister's level), I'd echo what others are saying - $19,500 for that complexity actually sounds quite reasonable. One thing I'd suggest is asking the firm for a breakdown of how they arrived at that fee. Most reputable firms should be able to show you time spent on different components - K1 processing, state return prep, review time, etc. This transparency helps you understand what you're paying for and can be useful for budgeting future years. Also, given the scale of her investments, your sister might want to consider working with the firm throughout the year for tax planning rather than just at filing time. With that income level and complexity, proactive planning could potentially save more in taxes than the additional advisory fees would cost. Many firms offer quarterly check-ins for clients with situations like this.