Price increase letter to tax preparation clients
Copy it, replace the bracketed bits, send it. Below the letter: the text-message version, how much notice to give, and what to say when they push back.
Hi [NAME], It is nearly time for your [TAX YEAR] return. Here is everything in one place. Your fee This year's fee for your return is [NEW PRICE] (last year: [OLD PRICE]). It covers [e.g. "your employment income, the rental property, and the capital gains on the share sale"]. The increase comes down to two things. My software and filing costs go up every year. And the rules have changed — [NEW REQUIREMENT, e.g. "the new digital reporting requirements" / "the changes to how gains are reported"] — which adds time to returns like yours. Get it to me early If I have everything by [EARLY DATE], the fee is [EARLY PRICE]. After [LATE DATE], there is a [LATE FEE] rush fee, because late returns are prepared at the busiest time of the year. What I need - [DOCUMENT 1, e.g. year-end income statements] - [DOCUMENT 2, e.g. rental income and expenses] - [DOCUMENT 3, e.g. brokerage statements] - anything new this year: [e.g. a new job, a sale, a new business] Your engagement letter is attached. Please sign and return it with your documents. [YOUR NAME] [BUSINESS NAME]
How many customers can this price rise lose?
10% ÷ (40% + 10%) = 20%
Open the full calculator, with your prices and customer count →with the engagement letter, before the filing season starts
8–15%, or a fee set by the return's complexity
The text-message version
For the customers whose entire relationship with you lives in a phone. Send it before the visit, never on the invoice.
Hi [NAME], [YOUR NAME] here. Your [TAX YEAR] engagement letter and document list are in your email. Fee is [EARLY PRICE] if I have everything by [EARLY DATE].
Why it is going up, in words you can use
“Rising costs” persuades nobody because everyone says it. Name the actual driver in tax preparation instead:
- professional tax software is priced per return or per seat and rises every year
- new filing rules and digital reporting requirements add work to every return
- returns have grown more complex: side income, rental property, investments and crypto
- late documents turn the busy season into rework, and the fee has never priced it in
When they push back
You will hear these within a week. Having the answer ready is the difference between holding the price and folding on the phone.
- "I could use software for a fraction of that."
- "For a simple return, you really could." Be generous — and specific about their situation: "Yours has [RENTAL / SALE / SELF-EMPLOYMENT], which is where software users most often make mistakes." Clients who still leave for software often come back after their first notice from the tax authority.
- "Why is my fee higher than my friend's?"
- Say that the fee follows the return, not the person: "Your return has [X] and [Y], which take longer to do properly." Pricing by complexity is easy to defend when you name the complexity.
- They send documents in batches in the last week.
- This is what the early and late pricing exists for. Hold the rush fee the first time it applies, without apology. One season of charging it changes behaviour more than any reminder email.
Is a price rise even the right move for you?
Sometimes it is not. Sometimes the money is in a service plan for customers you already have, or in the job you are quoting below cost without realising. Describe your business in one sentence and you will get three specific moves back — priced per month, with the arithmetic written out so you can put your own numbers in.
Free, no signup, about thirty seconds. If one of them is a price rise, you will get the number to put in the brackets above.
Give me three movesMore letters: business services
Other trades
A template, not legal advice. If you have a written contract with these tax clients, check what it says about notice periods and price changes before you send anything — the contract wins over any template, including this one.