New to Real Estate · ATLANTA · Member since 2022 · 6 posts · 7 votes
I am at the early stage of my real estate investment journey with total of 4 properties and looking to add a couple this year. I have single member LLC and still have my W-2 wages. Until last year I was doing my taxes on Turbo tax but this year I am on the hunt for a new CPA to help me with my taxes and strategize my real estate investement going forward. My question is: is this the right time to add a CPA into my team versus using Turbo tax for small businesses?
If so, what qualities should I look for in a CPA? What is the average (fair) price to pay CPA at this stage?
Also this might be a little bit out-of-topic, But is it also the time for me to start looking for a business attorney?
After 30 years of DIY, my wife insisted I go to her CPA after my first IRS Audit. They finally nailed me for $9,800 & two years later they sent it all back with interest.
My second IRS audit (for tax yr 2019) dragged out for 6months of back & forth phone calls, emails & volumes of scanned documents/ledgers. It was initiated because the new young CPA assigned to my return made a subtle, lazy, stupid mistake in recording a carry forward loss. The IRS agent then went back from 2019 to 2012 (the year of my last audit) dwelling on numerous random petty expenses, the many property purchases/sales, partnership %'s etc etc. My wife was convinced it was a training exercise for the agent.
Again I handled the entire audit myself & managed to come out unscathed, but ONLY because we keep excellent detailed records.
Absolutely use a CPA. We started using one last year and have captured WAY more tax advantages. This also helps you stay away from any errors, I had some tax bills come back from several years ago after using Turbotax. We are growing our portfolio and plan to get with a CPA who specializes in real estate investing down the road. We payed $350 and saves 3X that in write offs last year.
After 30 years of DIY, my wife insisted I go to her CPA after my first IRS Audit. They finally nailed me for $9,800 & two years later they sent it all back with interest.
My second IRS audit (for tax yr 2019) dragged out for 6months of back & forth phone calls, emails & volumes of scanned documents/ledgers. It was initiated because the new young CPA assigned to my return made a subtle, lazy, stupid mistake in recording a carry forward loss. The IRS agent then went back from 2019 to 2012 (the year of my last audit) dwelling on numerous random petty expenses, the many property purchases/sales, partnership %'s etc etc. My wife was convinced it was a training exercise for the agent.
Again I handled the entire audit myself & managed to come out unscathed, but ONLY because we keep excellent detailed records.
I've got 17 SFR and still use turbo tax. It's simple and easy. I pay a little extra for the audit protection in case I ever get audited. I've never paid a cent in taxes due to the carry forward losses from previous years. I'm a fan of turbo tax.
Fascinating--I thought I was the rare DIYer with TurboTax. 8 properties, 5 of which were BRRRRs and still doing it myself. This will be my last year due to various reasons so I will need to find a CPA this year for my 2023 returns.
There are lots of great resources out there, even if you do use a CPA. Keep in mind that most CPAs are not tax planners. They file, but ultimately, ensuring you have the right deductions and have found the right legal and ethical ways to reduce your tax burden is your responsibility.