Tax Strategies for Rentals

Tax, SDIRAs & Cost Segregation
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Tax Strategies for Rentals

Blake Clement
Member since 2017 · 6 posts · 3 votes

I have 3 doors that generate $3,500/month in rent. My goal is to buy a 4 plex this year. My wife has a W2 job that she makes about 63k/ year. I have a W2 that makes about 80k/ year. We owed about $2,200 in taxes last year. I want to get a financial strategist to help lower the amount of taxes I pay. Right now the company I want to use charges $3800 for the tax plan and then any where from $700-$2000 for filing the taxes. The $3800 is a one time charge. Are these fees comparable to what other places charge? Is it worth it for me to pay those kinds of fees since my relatively small at this point or should I just pay the taxes and wait until the fees of a finacial strategist put weight the cost of my taxes. I would appreciate any advice! Thanks. 

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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
5y
Originally posted by @Blake Clement:

I have 3 doors that generate $3,500/month in rent. My goal is to buy a 4 plex this year. My wife has a W2 job that she makes about 63k/ year. I have a W2 that makes about 80k/ year. We owed about $2,200 in taxes last year. I want to get a financial strategist to help lower the amount of taxes I pay. Right now the company I want to use charges $3800 for the tax plan and then any where from $700-$2000 for filing the taxes. The $3800 is a one time charge. Are these fees comparable to what other places charge? Is it worth it for me to pay those kinds of fees since my relatively small at this point or should I just pay the taxes and wait until the fees of a finacial strategist put weight the cost of my taxes. I would appreciate any advice! Thanks. 

 That’s too much based on your activities. Your tax situation is pretty simple and can be planned in 15 minutes call. 

[email protected]941-914-7779
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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    5y
    Originally posted by @Blake Clement:

    I have 3 doors that generate $3,500/month in rent. My goal is to buy a 4 plex this year. My wife has a W2 job that she makes about 63k/ year. I have a W2 that makes about 80k/ year. We owed about $2,200 in taxes last year. I want to get a financial strategist to help lower the amount of taxes I pay. Right now the company I want to use charges $3800 for the tax plan and then any where from $700-$2000 for filing the taxes. The $3800 is a one time charge. Are these fees comparable to what other places charge? Is it worth it for me to pay those kinds of fees since my relatively small at this point or should I just pay the taxes and wait until the fees of a finacial strategist put weight the cost of my taxes. I would appreciate any advice! Thanks. 

     That’s too much based on your activities. Your tax situation is pretty simple and can be planned in 15 minutes call. 

    [email protected]941-914-7779
    INVESTOR FRIENDLY CPA®5240 Reviews
    WebsiteView Page
    TaxMD® | Tax Planning Software
    WebsiteView Page
    4Reply
  • Daniel HymanBusiness Member
    CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    If the tax plan includes a magic wand, then the price is right. Otherwise, I agree with @Ashish Acharya. 

    My Online Accountant572 Reviews
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  • Blake Clement
    OP
    Member since 2017 · 6 posts · 3 votes
    5y

    @Ashish Acharya

    Ok thank you for the advice, do you know what would be considered a reasonable price for someone in my situation?

    1Reply
  • Blake Clement
    OP
    Member since 2017 · 6 posts · 3 votes
    5y

    @Daniel Hyman

    No magic wand included I guess, thanks for the advice!

    0Reply
  • Alexander Szikla
    Real Estate Agent · New York City · Member since 2020 · 819 posts · 641 votes
    5y

    That seems very expensive! Shop around accountants!

    0Reply
  • Patrick J.
    Rental Property Investor · Tucson, AZ · Member since 2019 · 173 posts · 87 votes
    5y

    @Blake Clement

    Idk how they would lower anything. If all your retirement accounts are already maxed out, you can't do anything unless you lie and take real estate rental losses as a real estate professional.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Blake Clement at the end of the day, there are only so many legitimate business write offs. Your two major expenses will be depreciation and mortgage interest. In many cases, these two expenses will balance most income on rental properties. Beyond that, owning only three properties really limits what you can expense. Even things like automobile and cell phone need to be split between person and business use. The IRS isn't stupid. They look at thousands of taxes and know what it costs to run three properties. 

    The other challenge you have is your combined income is high enough that you are in the roll off phase of passive loss on your W2. Once you hit $150K, there is no passive loss you can claim, unless one of you is a real estate professional. 

    My advice is start out by reading the book NOLO Every Landlords Tax Deduction Guide. You can check it out of the library in most cities. The book will give you a good overview of what deductions are available. Before you hire someone, get educated enough yourself to speak with them intelligently. 

    I would recommend finding a good tax accountant, but the prices you quoted are too high for the size of your portfolio. 

    1Reply
  • Blake Clement
    OP
    Member since 2017 · 6 posts · 3 votes
    5y

    @Joe Splitrock thank you! I will definitely read that book. Thanks for the advice!

    0Reply
  • Bill HamptonBusiness Member
    Accredited Investment Fiduciary, AIF®, Financial Planner, Tax Strategist, Real Estate Investor · Atlanta, GA · Member since 2012 · 2k+ posts · 978 votes
    5y

    Blake, 

    I recommend finding a new tax strategist with better prices. 

    Good luck and let me know if you have any questions. 

    404-482-3170
    Hampton Tax and Financial Services LLC4.7106 Reviews
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    0Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Blake Clement    If you're looking for a tax strategist for your rentals you should reach out to @Bill Hampton and his team. I am in the East Bay of the San Francisco Bay Area with rentals here as well as Ohio and Bill's team has certainly helped me in the past with Tax Strategies and I will engage him again this year as well.

    2Reply
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