Need a CPA in San Antonio area.

[Pat Bruton]

Needing a CPA to help with taxes. I have had one SFR rental for 5 years and am purchasing my second with two other partners and we are forming an LLC. Need some help and need to know what typical CPA costs per year are for something of my level? Thanks BP!

[Angel Cepeda]

Pat,

Check out Ridout, Barrett & Co or Padgett Stratemann here in San Antonio. I've worked for both firms and both have very sharp people working on their teams. As far as costs per year, I'm sorry to respond with "it depends". Costs can go from as little as a few hundred dollars for a small business tax return to several thousand dollars per year. Their question to you will be "how much work there is to be done?" (i.e. will they be doing all the partners' taxes, or only be handing the business tax return). Before you call them though, let me give you a few points to consider.

You certainly don't need your CPA to be licensed in your state, although it is preferred. Really the firm you choose just needs to be familiar with your particular State's tax laws, that is the State in which you are conducting business. Most regional firms have this capability so you may very well find a firm in Alabama that will fit your needs.

Having said that, the next order of business is to ask, what are your long term goals with this partnership? From a tax liability standpoint, the main question is that of whether your endeavor will generate ordinary income (earned or wage income), passive (rental) income, or both.

1. If you are only interested in rentals (passive income), then you may not need to file an LLC with your State. If that is the case then you might look into starting a Limited or General Partnership, depending on what capacity each partner wants to be involved.

2. On the flip side (no pun intended), if you plan on purchasing property for flipping real estate (earned income), then some or all of your income will be subject to FICA (SS & Medicare), depending how much you make and how you are filing your taxes (1065-Partnership vs 1120s - S-Corporation). Each State is different, but if you open an LLC, there are additional filing requirements at the State level that could be an unnecessary headache down the road (listen to podcast 162 with Amanda Han, CPA).

If you have any other specific questions, please don't hesitate to ask.

All the Best,

Angel Cepeda, CPA