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Updated over 4 years ago,
Real Estate taxes costs for small LLC
My wife and I started our real estate journey last year and have 2 properties working on 2-3 more. We started an LLC in order to leverage the tax benefits of the business and possibly offset some tax liability. This is the 1st year I have anyone do my taxes and contacted a local CPA firm. They quoted $700 to do the business and personal taxes. That sounded reasonable and my savings would more than make up for that being in the 20+ tax bracket. Turns out that is correct we saved thousands with my wife qualifying as a real estate professional. However the tax bill came back at $2100. There was never a mention that the bill was going up just a phone call at the end that the time had been underestimated. When I questioned the obvious I was told that a lot of time had not even been counted and it would have been more. Going forward now that its all set up the bill would be more in line with $700-$1000. I gave them a spreadsheet with ALL expenses detailed so no receipts to compline all the income and other bills were included. The only extra paperwork was the closing statements.
Questions;
1. Is $2100 reasonable for small 2 unit business and personal taxes?
2. If not reference for Cleveland area CPA that knows real estate tax law