How Much Should I Pay for a CPA / Do I Even Need One?

[Mason Myers]

Hello all!

I'm a new investor in my 20's, getting ready to file my first year of owning a Duplex - renting half and living in the other half. My questions surround how to structure my taxes of course. I've always filed myself, very cut and dry profile...single, no kids, no LLC, W2 wage. A 15 minutes on TurboTax type. With the Duplex now, my understanding is I file as though the rental half is a separate property and cut all expenses in half as a write off to my rental income (property tax, insurance, maintenance, improvements, etc...nothing was done specifically to either unit it was full home external work like garage and railing repairs, painting) as well as depreciating the half of the duplex that is a rental after calculating basis.

It all seems very straightforward to me but I know I'd be naive not to have a second set of eyes with a professional given my lack of experience. However I don't want to get taken to the cleaners for hundreds or thousands for someone to essentially say "yep, looks good."

I'm sure everyone will tell me to still get one, but what in your experience is a reasonable price for a client like myself? Also, open to recommendations if I decide to hire someone. I'm in Metro Detroit, Michigan.

Thank you for your time, cheers!

[Jana Cain]

@Mason Myers Pricing will vary quite a bit, based on several factors. A firm with employees will likely charge more than a single preparer office (due to overhead, etc). Some pros only work with REI clients with a minium portfolio size. Based on what you've described, in my area a return like yours would probably start at maybe $400 (with a solo preparer) and go up from there with a preparer that has staff (the bigger the office, the higher the cost). A firm whose pricing structure I follow for reference starts their individual return fees at $800.

Being that we're already into February, you may have trouble finding someone to work with for TY2023 as many pros don't take on new clients once the season has officially gotten underway. Unless you're okay with filing an extension.

I will also note that some (many?) preparers don't offer a "review" or "second set of eyes" for a client prepared return. If a new client brings me a return they've prepared (but haven't filed) and wants me to check it for errors, I'm charging them the same as if they brought me nothing. This is because the only way I can check for errors is to start with the same information they started with and enter it myself. Aside from any glaring errors (like data fields that are blank that shouldn't be, or more commonly, depreciation that seems wildly high because the client didn't know that you don't depreciate land), I won't be able to spot missteps without seeing all of the data that went into the return.

I hope this helps!