Switch to a tax preparer who is also a REI?

Question

we just filed our taxes and i have been going to her since i started working as a registered nurse, she helped in advising me with deductions that i was able to take, but as i have planned to purchase more rental properties, i feel that she might be inadequate in helping me move forward. i was looking for someone who could possible advise me on what steps i can take to advance my REI plans. Im not expecting her to tell me what or where to buy, but someone who can give me tips on what would be more beneficial for my growing portfolio. When we were done with our taxes and i asked her how we could get a better return next year, she told me "hide your money in your 401K" that may be true but it made me realize her perspective, which was unfamiliar with REI. I feel very comfortable with her since I have been going to her for many years, but  i feel like there is more out there. Im in the los angeles area and i was also wondering if it would be beneficial to stick with her because she is familiar with my situation? thanks for reading.

Edward B. · Answer

I am in the same boat. My CPA has been doing my taxes for over ten years and definitely knows enough about RE to keep me out of trouble, but as I get more active I am concerned that he will not be proactive or assertive enough for my tastes. I want to maximize my tax advantages from real estate and that really takes a specialist. It was pointed out in the recent podcast with Amanda Han, you really need someone who specializes in whatever business you own to truly take advantage of the benefits that may only be available in your line of work. And with RE having so many potential benefits, you don't want to gloss over them. It could mean big bucks down the road.

Andres Rossini · Answer

Read (or listen) the book Tax Free Wealth by Tom Wheelwright and you will realize that there is hundreds of things out there to benefit you as a REI, and you might only be doing a few of those things. The book has a ton of information and it changes constantly depending on the court decision of recent cases. I would highly recommend you find a CPA that knows REI, and even better, one that is a REI him or herself. You might be leaving money on the table or maybe by doing a few changes in the way you run your business today, can have a huge impact next filing season.

Ned Carey · Answer

Your tax preparer does not have to invest him or herself but certainly should know real estate taxation hands down. Is she a CPA? That certainly isn't a requirement but a CPA should have a decent handle on real estate taxation.

BP just came out with a new book on taxes for real estate investors. Here is a link

http://get.biggerpockets.com/taxbook/

BP just came out with a new book on taxes for real estate investors.  Here is a link

http://get.biggerpockets.com/taxbook/

Marichelle Lao · Answer

@Bryan Otteson point taken sir. That is an excellent way to look at it, especially if I'm trying to save a few dollars or make any short cuts. Trust those with the expertise or learn my lesson the hard way.

Marichelle Lao · Answer

Hi @Benjie DeVera Thanks for the heads up! How funny that you mentioned them. I know someone (friend of a friend of a friend, hahaha) that works there and I was in fact looking them up today! I also live in Glendale and know exactly where it is. I'll have to check out their meetups. Thanks again.

Benjie DeVera · Answer

@Marichelle Lao One of my business partners chose to go with Robert Hall and Associates in Glendale. You can Google them. Specifically, he went with them because he wanted to talk to a CPA who has knowledge of doing a 1031 exchange and he's transitioning into commercial deals. Of course, their service fees might be a little bit higher than others. They also have networking meetups once a month or so, and they go over tax strategies for real estate investors.

Bryan O. · Answer

@Marichelle Lao

If you decide you need to have a bunch of electrical work done in your properties do you use your handyman for it? Or do you get someone that is trained and certified and works mostly/primarily on electrical stuff?

Marichelle Lao · Answer

Hi @Ned Carey, she is not a CPA and for the most part she is knowledgeable in real estate taxation. Since I did not work last year, but i just had my 2 rental properties I filed 2 schedule Es. I did listen to the podcast about the tax book for savvy real estate investors today, and i feel my tax preparer covered  most of the bases. Thanks for the link.

Switch to a tax preparer who is also a REI?

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