Are accountants necessary?

Question

Do people usually include accountants as part of their team?

I’ve owned certain companies outside Canada and would do all finance/cashflow myself, but real estate is a new field to me as well as doing finance in a country which is not tax free.

Example questions: Under which entity should I be under before purchasing real estate to protect myself and my family from bankruptcy? (Could be a lawyer question, but should I include one too?)

Investing from overseas as a non-resident, how do I file for a withholding tax reduction and which taxes am I looking at here? I think downpayment needs to be 25% as well rather than 20%? I’ve done a bit of research but don’t know where to start to apply these.

I have enough capital for 4-5 down-payments, should I be transferring these amounts to my old Canadian bank account before getting pre-approved before receiving a loan or I can do everything with my overseas bank account if the loans are cheaper here?

So many questions...

Long-distance investment adds another layer of research, it’s a killer. Can’t seem to just “jump in” already.

All this to say, do you get accountants or do everything yourselves while within country? If you were out of country, would you still have / think about having an accountant?

Stephen Fryer · Answer

Hey @Erik PilonSeems with all your questions, the answer is kinda self evident. I'll pm you with a couple of referrals for accountants with cross borer experience that you can speak with. As a Canadian, we have to pay taxes on all our earnings worldwide. If you want to avoid double taxation, you need to make certain that you have an entity recognized by the CRA as flow through.

Frank Chin · Answer

I at one time had active businesses, via S Corps, C Corps and LLC's though I never placed my rentals in an LLC. At it's peak, I spent 2 full days a week on bookkeeping, let alone do taxes. I know enough to prepare State taxes where I compute withholdings, unemployment taxes, disability insurance etc. I say compute as my CPA also computes and files for me as a double check.I have an experience once where my CPA left his practice and thought I knew enough to do it myself, as I have a MBA in finance, and didn't have one for several years. It became too time consuming eventually that I went out and got a CPA. He ask for my returns for the last two years to get familiarize, and found I missed some deduction, and errors that cost me the same as if I hired a CPA. Since then, I had him as CPA, now going on for 30 years.When I didn't have a CPA, with several businesses, you often have a accounting and tax question, and I try to look it up on the internet, ask friends, not always to best way to get the best answer. With my CPA, he calls me on my cell, and if I have a quick question call him on his cell. Also, he's not too computer literate, he calls me, and I would answer right away, and saves him a ton of time. This year, he had a several little problems, took me a few minutes over the phone each time, and he credited me $150.00 towards accounting fees.Aside from missing deductions, the taxpayer is accessed fines and penalties, and with a CPA, I expect that he will take care of all of that, besides helping me avoid missing deductions. For my rental business, one mistake I made was to capitalize everything, take too long to depreciate. I had no luck with hot water tanks, I depreciate it over ten years, and they only last 5 to seven. When he took over, I have several hot water tanks partly depreciated for each building because I didn't charge off the final depreciation. A few years ago, he started charging off capital expenses that is below $1,000, since increased, so I no longer have these issues.Conclusion is, time is money. But in this situation, I got a friendship that is more valuable and important.

Caleb Heimsoth · Answer

@Erik Pilon. My cpa is one of my most trusted team members. Makes my life so much better in every way possible

Brian G. · Answer

@Erik Pilon I don’t mind being my own accountant, it’s the proactive tax efficient strategies that make a CPA so valuable imo. I’m happy to pay every nickel of what I legally owe to the government as a tax paying and law abiding citizen but not a penny more.

Angie Shires · Answer

@Erik Pilon yes! A good CPA will pay for themselves in tax savings. It’s a good idea for you to also stay educated yourself on the tax laws, but you’ll never be able to grasp it all! Make sure you get referrals (BP is a great place to get them).

Syed H. · Answer

10000%Don’t be cheap. You will be shooting your self in the foot.Also, one audit because of an honest mistake that you did wrong can cost you more money than you save by not using an accountant.

Basit Siddiqi · Answer

@Erik PilonHaving a CPA on your team will be able to answer the questions you have, provide confidence that your return is prepared accurately, save time, provide steps to lower taxes, etc.

Ahad Ali · Answer

Most people on BP get accountants unless they can handle their situations themselves. But those with more complex situations do seek an accountant.

Erik Pilon · Answer

Maybe just a consultation is needed?