Do I need a CPA?

Question

This is my first time filing taxes and having investment properties both purchased late last year. Normally my wife does our taxes through Turbo Tax and that’s what we are planning on doing this time as well.

But what do you guys think? And does anyone have a good recommendation for an CPA in the Nashville area? Thanks!

Eliott Elias · Answer

If you are asking yourself the question than you need one.

Chris Seveney · Answer

@Matthijs Pol

1. Yes get a cpa.

2. Since you are up against a clock, I would go to a local firm like an H&R Block or someone like that for this year and next year find a permanent cpa.

Simon W. · Answer

Pretty much. I mean I handle the books for my clients and by the time the financials gets to a CPA, majority of the work is done already and the only left is how much depreciation is needed depending if it's accelerated for equipments or not.

You are paying top dollars for a CPA when you can get a consultant to charge you a fraction of it.

Not all CPAs are equal and not all of them are competent.

Becca F. · Answer

Wow you have 17 rentals and use TurboTax? Does it make a difference if you hold the rentals in LLCs or own personal name as far as how complicated the taxes are. I don't have any LLCs yet (I know that topic has been discussed to death on BP).

I have 3 rentals on my 2022 return, with a 4th rental that I just closed one to report on my 2023 taxes. I just got off a TurboTax call and she recommended that I take my documents and sit down with a CPA and that I should be getting Schedule Ks. She said if I want to do it on TurboTax myself I can.

I got confused with the improvements I made on a rental - I paid the contractor XYZ amount (materials and labor) and he purchased the rough materials (drywall, insulation, recessed lights, bath tub, shower enclosures, paint, etc). I bought the kitchen cabinets, countertops, other lights, faucet fixtures, bathroom vanities, tile). On the improvements am I just adding up the costs of materials? It wouldn't make sense to add the labor cost in to the value of the home but that was a large part of the total cost of renovation. The TurboTax rep seemed impatient with me and kind of rude so I didn't want to annoy her anymore.

John Morgan · Answer

@Matthijs Pol

I’ve got 17 rentals and use turbo tax. It walks you through everything and is easy to do. And saves everything year to year. I pay an extra $40 for audit protection which they work as my representative if I ever get audited.

Luka Milicevic · Answer

No brainer-get a CPA.

I have an MBA in accounting (but not CPA). I did advanced tax in graduate school and did my own taxes until I actually started investing in RE.

A CPA that does RE taxes keeps up with laws/changes in tax laws.

I did my own taxes one year and compared to what he did for me. He more than covered his cost with the amount of stuff I had no clue even existed.

See Hauser CPA group. He does my taxes and gives good advice too on strategy.

Soh Tanaka · Answer

I would hire a CPA. I used to use TurboTax, but I started working with CPA, once my situation got a bit complicated. To be honest, at least for me, it was not so much about my CPA finding "secret" loopholes to save me money, but more so doing the things right, and saving my time.

I wish there is an easy way to convert my QuickBooks date to a tax return, but as you know, tax is insanely complicated, so I rely on my CPA to file it.

Matthijs Pol · Answer

Thanks everyone!! Much appreciated, I am actively looking for a CPA now.

Thank you

Drew Sygit · Answer

@Matthijs Pol you need a tax professional familiar with real estate properties, not necessarily a CPA.

If you want to spend HOURS looking into the tax code and Googling, you can still do it yourself.

Becca F. · Answer

@Matthijs Pol

I've done my taxes through TurboTax Premium with two rentals, one a multi-unit, where the property management team sends me monthly reports and a 12 month cash flow sheet. It takes a lot of time. I had to call the TurboTax help and one of their CPAs checked my returns and walked me through an error I found. Depending on who you talk to, the TurboTax CPA can be helpful, the last one I spoke with was also a real estate investor. Last year I did a major renovation on rental property #3 so I paid a contractor in addition to buying some of the materials myself. I'm starting my taxes now.

No one I know has a recommendation for a CPA locally - the two people I know with rental property wouldn't recommend their CPAs, not a good sign. I know should I get a CPA.