Enrolled Agent? CPA? Tax Attorney?

Question

There are a lot of the above mentioned in here but how does one choose the best agent to go with? I'm sure everyone here is an expert at some level but like all things some are a better fit than others for a situation. From past experience I've learned that one person sometimes just wants to click a few buttons on turbo tax and others live it and know every loophole, tax break etc.

We are in need of someone who can help in a few areas. Figuring out how to set up this business where I and my business partner get the most out of tax benefits and protections. My business partner also needs to get his taxes for this year prepared and filed.

So how does one choose the right person to fit? I thought at first a Tax Attorney would be the best person to talk with but then people mentioned EA that I've never heard of. Then everyone seemed to be back and forth, a CPA is better than an EA, an EA is better than a CPA, an EA is cheaper than TA and knows the same stuff.  Then I started to see using a different state as the business address may have stronger LLC protections than another like Nevada etc. It tough going the right rout.

Daniel Hyman · Answer

@Steven Hamilton II

My intent was in no way to bash credentials. To the contrary, my intent was that the OP should consider EA's just as qualified, if not more. I apologize if it came off otherwise.

Daniel Hyman · Answer

A CPA is the typical route for tax, however there are plenty of EA's that are even more knowledgeable and tax savvy than CPA's.

It looks like you have asset protection questions as well, so you'll need to loop in an attorney at some point. If price is not too much of a deterrent, you'll likely get good advice from a tax attorney who can fill both roles.

Michael Plaks · Answer

@Todd Groom

Different tools for different jobs.

General tax preparation and tax advice. This can legally be done by people without any license. Among licensed professionals, the choice is between CPAs and EAs. CPAs are licensed in accounting by states - a broad state-specific license. EAs are licensed in taxation by the IRS - a narrow Federal license. Among general practitioners, EAs tend to be somewhat cheaper than CPAs.

Specialized tax preparation and tax advice. In REI, it's absolutely critical to have a specialist. If you compare a real estate CPA against a real estate EA - you will not find much difference in technical competence, services or prices. There're 20+ accountants actively contributing to this forum. Some of us are CPAs, some are EAs.

Bookkeeping/accounting. CPAs have an edge here, because they are specifically trained and licensed in accounting, and certain accounting tasks require a CPA license.

Defending against the IRS audits and collections. It can be done by CPAs, EAs or attorneys, as long as they specialize in IRS representation. EAs have an edge here because IRS representation is their focus. If your fight with the IRS goes so deep that you are taking the IRS to court - then you need a Tax attorney. Otherwise, they are usually an overkill.

Setting up a business. This is a job for an attorney licensed in your state. However not a Tax attorney, but a Business or Asset protection attorney - a different specialty. You also need an accountant (a CPA/EA if you want a licensed pro) to advise you on the best tax structure, working in tandem with your attorney.

Bottom line: you need a business attorney plus either an EA or a CPA, all of them must be REI specialists. This forum is a great place to find and vet these professionals.

Alina Trigub · Answer

@Todd Groom

You need to find an accountant that offer tax strategy to help you with future planning. You also need an attorney that offers asset protection. You can do it from either side: Find a tax strategies specialist (most likely will be  CPA as well) and ask for attorney recommendations and/or find a good attorney and ask for tax strategist recommendations. Chances are pretty high if either professional recommends the other one that they know each other well and work with other and that is exactly what you want to happen: your CPA and your attorney to discuss your matters from both angles.

Best of luck!

Account Closed · Answer

If you have current tax issues go with an Enrolled agent. If you are setting up accounting and future tax planning go with a CPA experienced in real estate (not all are). If you are planning asset protection, tax strategies, entities and inheritance go with a tax attorney who specializes in asset protection, real estate  and taxes (not all do). Married green card holders are not an issue. She should do the right thing and become a citizen when possible, but that is a different discussion. ;-) We love green card holders.

Todd Groom · Answer

@Michael Plaks are you an agency or self employed? In shoot you my email get some info. I’m one of these people that just have no idea if I’m getting everything I need lol. Cause I’ve been steered so many ways while doing all this.

Like at first I was told stay away from an LLC then now I’m learning it’s like almost mandatory to try and protect yourself. Then I’m learning every day about tax credits I didn’t even know I could use like the interest off every property which is a lot in the end. Then I was watching a thing the other day about credits if we pay the utilities with HUd where we could make more money back then what they even pay if we pay utilities. Just all sorts of stuff it’s so much info. So I’m hoping to find an expert in HUD, tax credits in general, etc. also here’s the kicker. I have a second private business that’s not realestate. It sort of runs separately because it has partners and is in the healthcare industry. So I’m hoping I can separate them but maximize my write offs.

This new election is going to effect me if Biden wins. So sort of preparing for that also.

I’ll DM you.

Michael Plaks · Answer

Congratulations on your business growth!

There're some FL accountants on this forum, including @Lance Lvovsky from Fort Lauderdale. Don't know anyone in Tampa. But if you're searching statewide, you can just as well expand nationwide, as it is virtual service either way. Then you can choose from 20+ real estate specialists who contribute to this forum. We all work remotely.

Todd Groom · Answer

@Michael Plaks are you able to recommend anyone in Florida. Things went a little overboard and when we planned on one unit in March now closing on numbers 5 and 6 with a total of 15 doors so far. Buying them faster than we can set the business up.

So we are in dire need of I guess a CPA and businesses specialist to make sure we are set up correctly. Currently I’m tracking and logging everything with Stessa and Cozy. There’s just good deals to be had so grabbing them while things are good.

Steven Hamilton II · Answer

Daniel, no need to credential bash.

An Enrolled Agent is licensed by the United States Treasury. An EA can work anywhere and is not subject to jurisdiction. EAs specialize in tax and study tax.

A CPA is licensed by his or her state. A CPA can audit financial statements (most don't do assurance work because of overhead and compliance costs). CPAs study account and potentially tax. It depends upon the CPA.

Todd Groom · Answer

@John Farady ok thanks. And yes they are legal lol but still a very long and expensive process to become a citizen. That’s why they are trying to find someone who can handle it all. Hopefully there’s some write offs in there somewhere. The legal way def is not the cheap way. But what I meant by green card holder was more that they are legally working and paying taxes if need be. I’ve heard some people say file married but separately vs jointly if they don’t have as much income or if they don’t have income? One person said don’t file at all if they didn’t make enough money. So it’s very confusing.

I forgot to ask an important question, do they have to be licensed in my state or the state the business is operating out of? Or does their license allow them to operate country wide?

Are there any firms on here anyone can recommend that have all three?

Enrolled Agent? CPA? Tax Attorney?

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