Question for any CPA's regarding HOA taxes
Hi,
I recently discovered that my one HOA has been using the same CPA to file Form 1120-H for the Association's taxes every year at a flat fee of $300. I filed the form myself for 2018 and the entire process took maybe 10 minutes. I feel like $300 is an extremely high fee for such a simple filing (by comparison, my personal CPA is located in Boston and charges $200/hour), so my question is...does this seem normal or is something going on that I should be concerned about? I was hoping to get a CPA's opinion.
Thanks!
Most Popular Reply
The issue here is that there's way more to this than just "filing the 1120-H".
Each year, the HOA has a choice between filing the 1120H and an 1120.
Do you know which years it will be better to file which forms? Your CPA likely knows and makes the best choice for the HOA every year.
If you don't know, then your "10 minutes" of time and your denigration of both @Basit Siddiqi fee and the current CPA fee will definitely bite you in the butt later when your entire HOA community has their torches and pitchforks out for you because you filed a form one year that ended up not being the best for the HOA.
This is why you hire a CPA. Not only will they bring their professional knowledge into play regarding the best return to file, they also carry Errors and Omissions insurance in the even they are wrong.
Your HOA's E&O insurance WILL NOT cover you in the event you messed this up because you were not performing a duty that an HOA board member normally performs. You took on a duty that is better done by a professional and the insurance company will drop you faster than a hot potato if they find you are stepping outside of your lane.
Good luck
Signed - a CPA with 20 years of experience who also serves on 3 HOA boards.