CPA advice

[Bulldog0156]

Seems like there are a lot of relatively knowledgeable folks on here and even a CPA or two . I'm at the point where it makes financial sense to go with a CPA due to investment and real estate assets (multiple rentals). Just looking for some advice so I don't look like a complete idiot or miss something important. Looking for a CPA to do our taxes and provide logic for some of those tougher decisions related to maximizing wealth related to our assets. Some general questions I have are:

What do I need to know?

What do I need to be thinking about?

Is there anything I need to be thinking about or doing to maximize my investment in a CPA from a time/cost perspective? They're not cheap and I don't want to have them racking up time on simple things I can be doing.

Any advice is greatly appreciated.

 

[Big Fin]

I would ask if you are considering this due to saving the time, hassle, and headache that comes with the Schedule E rentals and depreciation, or if you think there will be a big tax savings. Reason I ask is that once you have the rentals on Schedule E with something like TurboTax, there's not a lot of complication and not a lot of tax savings to be had, making a CPA cost hard to recover just in tax savings. Now, if you had a business on Schedule C or LLC/S-Corp, plenty of savings to be had and well worth the cost.

If it is just to save the headache and know it likely got done right, the best way to keep costs low is to be as organized as possible. Most firms have some fee structure for tax returns that is a function of how many forms and how complicated the return is. Our software even gives us a "complexity rating" for every return. Firms usually have a set price based on that, then they add costs for meetings or other issues that come up in the course of doing the return. The largest cost increase is for people who can't organize their information. There's a huge a premium for bringing in a mess. And if you want an extension, expect a bigger increase.

Have your rental activity organized in Quicken or something similar. I would answer every question they ask of you in their "client organizer" form they send you in December. That allows them to be very efficient and not have to ask you a bunch of questions over the phone or via email.

 

[wolfpup]

If it is just to save the headache and know it likely got done right, the best way to keep costs low is to be as organized as possible.

That's the best advice I could give as well! Don't bring in a mess because your time is too priceless to keep things tidy. The only thing we as CPA's have to sell is time. Some people don't mind sifting through shoe boxes of receipts, but I won't do it. That type of service is better suited for non-CPA's in my opinion.

I would answer every question they ask of you in their "client organizer" form they send you in December. That allows them to be very efficient and not have to ask you a bunch of questions over the phone or via email.

Agree with this statement as well. Probably worth a sit down meeting prior to December if you want this to be effective as a new client.

They're not cheap and I don't want to have them racking up time on simple things I can be doing.

Knowledge and experience is not cheap to obtain! If this is a legitimate business and investment, a couple hours of billable time should not be a concern.

Is there anything I need to be thinking about or doing to maximize my investment in a CPA from a time/cost perspective?

Be clear about what you want out of a service from a CPA. If you think you already know everything, don't be snotty about that simple task that you did yourself to save a buck that burns you. Entity selection is not as simple as google makes it sound. Be honest about the research that you have done and talk openly about it. Don't let us waste time explaining items that you already researched and understand. I'll say it again that the only thing we have to sell is our time. Don't expect to ask us everything under the sun and how this is done and why, but then not expect to get some sort of bill for our advice and counsel.

 

[bwanakubwa]

All I can say is good luck. It can't be very hard to find a CPA that has time and interest in new clients. I'd refer you to my guy but I don't need him getting any busier! I found a great CPA by asking a friend who is a fellow business owner

 

[Bulldog0156]

Thanks guys. We're mostly looking to save a headache on our end and get our taxes done right. I'm not dumb, but I don't really have the energy to figure out the complexity of taxes the first year; there have been a lot of changes since January 1. Hopefully down the road I can understand better what I'll need to do and get it done myself, but until then I think I want a professional.

 

[Bulldog0156]

@wolfpup @Big Fin Follow up question: I've been thinking more about your responses and I'm wondering if we would be better off just getting the premium TurboTax program or something. The big things that I don't know how to do are the Schedule E for rentals, calculating any depreciation, and I think I'm going to have some losses on investments that I need to take into account. I have previously used TaxSlayer for my taxes, but they got a whole lot more complicated in the last year and I haven't always found the tax programs super informative.

I sincerely appreciate your input on this stuff guys. Thanks.

 

[wolfpup]

Now obviously I don’t know your abilities or know your income but the majority of people that prepare their own return don’t do it correctly. At least not continuously. The tax software you use still charges a fee correct ? Seems to me you would be better off in the hands of a CPA. The type of return your describing is not a lot of money and I’m guessing the advance turbo tax or other software will run you $200 after you pay for state filing and what not. The tax softwares are great if you know what category to put stuff in but it will also let you out anything anywhere.

 

[longbow51]

Once you said depreciation, you said accountant.

 

[westbranch]

TurboTax could serve you well if you are diligent on input and review before filing. They have the best "interview" process. Only way it will be wrong is if you put in bad info, which is easy to do. I recently saw a self prepared TurboTax return that impressed the hell out of me. Which rarely happens.

With a couple rental properties or brokerage account having a CPA prepare could be more of a compliance exercise. Time/energy tradeoff that you noted as well. Now is the time to call. General theme across the country is that cpas are not taking on new clients.

 

[Bulldog0156]

Thanks guys. Confirmed my thoughts on getting it right with a CPA. We have one lined up but it wasn't easy!

 

[David Gough]

Some clients don't want the hassle of doing their own taxes. Some clients shouldn't be allowed to manage their own bank account. Other clients really could save money using the tax law to their advantage. Some business owners need a part-time CFO on their team. Really depends on your needs, wants, and the complexity of your situation.