Do I even NEED a CPA?

Question

Good afternoon,

My wife and I have W2's and started our two small businesses last year. She owns a consulting business where she generated less than 10k in revenue. I just opened my wholesaling LLC but didn't generate any revenue.

We do own a rental that is in our name (used to be our primary)

Is it beneficial for us to use a CPA? or can I do my taxes through like TurboTax?

I am going to assume that using a CPA is really not necessary right now since I really didn't generate a lot of revenue. Right?

Stephen Nelson · Answer

Just to add a handful of comments to those already shared.

1. Terrible shortages of tax accountants exist right now. Especially good ones. So, it's not a certainty you can even find someone worth paying. (Just to be clear, you probably can find someone who says they can do your return... someone who will charge you a seemingly reasonably price... but it'll be hard to find someone good.)

2. Most people should just use TurboTax or TaxCut and accept that, sure, they'd get better results from using a skilled accountant... but not enough to justify the cost. You do not want to pay $1,000 in tax prep fees to save $1,000. You want to spend invest $1,000 to save $5,000... or $5,000 to save $50,000.

BTW here's an example connected to your situation where a good tax accountant might have helped you optimize. So you're now renting your former principal residence. That means you're intentionally or unintentionally giving up or risking the Section 121 exclusion which would allow you to avoid tax on up to $500,000 of gain on the sale of that property. If you knew about this and considered the pros and cons of keeping the house as a rental? You're probably doing great with DIY. If you didn't know this and have missed out on saving tens of thousands of dollars of taxes? A good tax accountant would have really paid for their fees many times over.

Michael Plaks · Answer

Your wife owns a consulting business. What does she consult people on? Do they really need her consulting? Or can they continue to proceed without her help?

Because accountants are very similar to consultants. We provide some value, but people can also do without us. How much value? That depends of course, and here is a long post discussing this concept:
https://www.biggerpockets.com/forums/51/topics/1088325-expla...

Ashish Acharya · Answer

@Daniel Mendez Even with low revenue, working with a CPA can still be valuable—especially since you've transitioned into business ownership and rental real estate, both of which come with unique tax rules and opportunities.Here’s why a CPA might still be worth it:

• Properly setting up deductions for your consulting and wholesaling businesses (home office, mileage, startup costs, etc.)
• Tracking passive losses on your rental correctly and depreciating the property over time
• Ensuring accurate reporting of business losses, which can offset W-2 income if eligible
• Preparing for future growth, including entity structure, estimated taxes, and recordkeeping

That said, if you’re confident with tax software and your situation is relatively simple this year, using TurboTax could work. But a one-time consultation with a real estate-savvy CPA might be a smart move now to avoid costly mistakes later.This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

Aaron Zimmerman · Answer

It probably is beneficial to get a CPA or at least someone to double check that you're doing things reasonably correct. Calculating the right basis is crucial on rental properties and has large impacts down the road.

Jason Malabute · Answer

Yes, you definitely should consider working with a CPA, especially given your situation. Here’s why:

1.	Wholesaling Business & Entity Selection: You just opened a wholesaling business, and I noticed you used an LLC. A CPA can help determine whether that’s the best legal entity for you. Sometimes, using an LLC might result in higher self-employment taxes, and a CPA can advise on more tax-efficient structures.

2.	Maximizing Deductions: Since your wife’s consulting business generated less than $10,000 in revenue, it’s essential to ensure you’re capturing all potential deductions. A CPA can help identify expenses you might have overlooked, ultimately helping you maximize your tax savings.

3.	Rental Property Considerations: You own a rental property in your name, and there might be opportunities to claim passive losses to offset your active income, depending on your adjusted gross income (AGI) and whether you qualify as a real estate professional for tax purposes. A CPA can guide you through these nuances to minimize your tax liability.

Even if your revenue isn’t substantial right now, the peace of mind and potential savings from proper tax planning can far outweigh the cost of professional advice.

Fulton Sanchez · Answer

Hi Daniel, owning a rental and managing new LLCs—even with minimal revenue—can introduce complexities and opportunities for deductions or strategic planning. Many investors find consulting a CPA early saves headaches and optimizes future growth. You might find that even a brief consultation or tax review with a CPA experienced in real estate and small business could offersignificant peace of mind.

Markus Shobe · Answer

You probably don't need a CPA, but I would get a tax professional. It will be very beneficial for you going forward.

Diego A. · Answer

Hi @Daniel Mendez

You got very good answers here.

My background, I moved from W-2 to self-employed last year running two businesses, one as a realtor and second one as a flip and rental business.

I begun using TurboTax but I found that complex deductions were not taken in count and losing on that. Then I moved to tax consultants but as someone else said there are difficult to find.

In conclusion, I have done it myself, but doing it well will take you a couple of weeks so you have to think of it worth your time.

CPA is needed when you begin with a circle on revenue that is complex to track.

Hope this help.

William Whitley · Answer

Daniel,

I recommend using a tax advisor, but it doesn’t necessarily need to be a CPA. CPAs are absolutely well qualified to handle any tax situation that arises, but there are good tax professionals out there that are EAs (enrolled agents) who not only can provide tax advisory services, but also prepare your tax returns, and if necessary, represent you before the IRS.

I understand you may not think this is a necessary expense due to your current revenue, but if you have an issue like an audit, it would be better to have an EA or CPA that can represent you before the IRS than going solo. Furthermore, if you are transparent with your tax professional regarding your income and expenses, most likely they will make sure you get the benefit of every allowable deduction, while helping you avoid claiming deductions that IRS does not allow.

I do not personally provide tax advisory and preparation services. I refer that out to Enrolled Agents. I’m somewhat partial to EAs because my father is a retired EA in his 80s. However, there are situations where you may need a CPA, like when you may need a certified financial statement. You typically need a CPA for that.

You don’t need an EA or CPA until you need an EA or CPA. The problem is you don’t know when you will need one, so it is better to have one before you need them, so that when you need them, you already have them.

I hope that makes sense.

Louis P Lessor · Answer

I would start working with professionals early and establishing that relationship; even if it seems early, it will pay off in the long run as they can help guide you and help you avoid mistakes that will set you back. I have saved myself more money with using CPA then what I have paid them.

Do I even NEED a CPA?

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