Business Management

Confessions of a CPA: 3 Year-End Tasks I Wish All of My Clients Would Perform

Expertise: Business Management, Landlording & Rental Properties, Personal Finance, Personal Development
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As 2015 is comes to an end, it’s important that you start taking steps now to organize your documents and have your books ready for your CPA’s review. Being organized will make your CPA’s life easier, and ultimately save you money by avoiding extra preparation fees that often come with disorganized books and documents.

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There are three steps you can take to organize your tax information and make your CPA’s life much easier:

  1. Proactively speak to your CPA prior to year-end about any changes in your life that may affect your tax situation so that your CPA can provide you with tax planning if necessary.
  2. Consolidate and organize your books from your rental or business activities and sum up the various categories of income and expenses.
  3. Ask when your CPA will send out a tax organizer and make sure you complete all of it.

Proactively Speak to Your CPA

Though tax geniuses, we CPA folks are not wizards and cannot read your mind. While we tend to check in every once in a while, we won’t know that you are getting a huge bonus or that you bought a new property unless you tell us so.

Do you have your CPA’s cell phone number? If not, you should get it. All it takes is a simple text: “Hey Brandon, it’s Dave – just wanted to let you know I closed on a 4-unit yesterday. Anything I should know tax-wise?” If Dave had sent me that text, Dave would be getting a call from me because there are indeed many things we need to discuss and that Dave needs to be aware of that will affect his tax position.

Additionally, proactively speaking with us allows us to update our client files with current notes and will give us a better idea of your overall situation. This allows us to provide holistic, high quality advice, which often leads to more savings for you!


Related: A CPA Explores: “How Much Income Should I Allocate to Taxes as a Business Owner?”

Year-end communication and tax planning is critical, yet it amazes me that there are some people who refuse to pay their CPA’s hourly rate for a short phone conversation discussing high-level tax planning advice. That conversation may cost you $150, but the advice you receive may save you thousands in taxes. Trust me, we can quickly see where a client is missing deductions, but we can only deliver that information to you if we know about it.

We want to be your trusted advisor, and we want to help you reduce your overall tax liability. You aren’t paying a CPA for their tax prep services; you are paying a CPA for their brain – and that brain will save you thousands if you use it correctly. So call your CPA and initiate those conversations sooner rather than later. It becomes much harder and costlier to retroactively make changes.

Consolidate and Organize Your Books

The final version of your books may not be ready until the first week or two in January, but you can absolutely go ahead and start reviewing your books to get a good idea of where your rental or business activities stand for the year. Are you going to show income? If so, how much? Is it worth a talk with your CPA to see if there are any tax strategies you can implement to reduce your income? If you are going to show a loss, will you benefit from it? Your CPA will know.

Gather receipts to support various expenses. CPAs will generally want to review big ticket items like repairs and improvements, as well as grey matters like gifts, meals, and entertainment. These are common areas that are often misclassified or overstated, so we want to make sure that in the event of an audit, you are well protected and we can easily defend your tax position.

Ask your CPA how they want the information presented to them when you hand everything off. Does your CPA want to see a consolidated Profit & Loss (P&L)? Do they want to see everything broken out by class (that’s a QuickBooks term)? For those of you using Excel or the shoebox method, how does your CPA want things summed up, what categories should you be using, and will it cost you extra for year-end reconciliation?

Generally speaking, you should have all of the hard documentation you need to complete your books by January 30th. I’m talking 1099s, 1098s, W2s, etc. It’s important to review this information prior to sending it to your CPA to make sure your books are correctly stated.

Use the Tax Organizer

Generally, CPAs will send their clients some form of a tax organizer. The tax organizer serves two purposes: (1) it reminds you about different tax items that may have slipped your mind and allows you to send a complete set of documentation to your CPA, and (2) it allows the CPA to minimize liability from malpractice as we have a duty to ask certain, relevant questions.

Related: How to Prove Tax Deductions as an Investor: A Guide to Tracking Receipts

The tax organizer may seem daunting (some are around 50 pages), but hopefully your CPA has tailored it to your situation to make it less so. It is in your best interest to fill it out to the best of your ability. It is similar to filling out fields on Turbo Tax, except now you have a human brain reading your inputs and finding all the loopholes you can possibly find. And trust me on this, while machines are generally more efficient and smarter than the human brain, Turbo Tax will be no match for a good CPA.


The tax organizer is also to help make sure you send a complete packet of information and documents to your CPA. It relieves the CPA of constant back and forth communications and will help you avoid an organizational charge. Yes, CPAs will tack on a fee for incomplete information packets due to a tax organizer that was not 100 percent filled out.

The tax organizer will generally be made available to clients within the first couple weeks of January. Make sure your engagement letter with your CPA spells out the rules surrounding the tax organizer. For instance, does your CPA require your use the tax organizer and fill it out completely? Most CPAs will have verbiage in their engagement letters that states the engagement will not begin until the tax organizer is 100 percent complete and returned to the CPA.


It’s important to speak with your CPA proactively and regularly. After all, we truly want to be your trusted advisor and proactive conversations help with this. You should also begin organizing your books to determine if you need to reduce income or are eligible to take losses. Lastly, make sure you inquire about the tax organizer and when you should start sending documents to your CPA.

Year-end is right around the corner. Don’t let taxes stress you out over the holidays. Get organized today!

What steps have you taken to prepare for tax season? Any questions about the best ways to get organized?

Leave your comments below!

Brandon Hall is a CPA and owner of The Real Estate CPA. Brandon assists investors with Tax Strategy through customized planning and Virtual Workshops. Brandon is an active real estate investor and a Principal at Naked Capital, a capital group investing in large multi-family projects and manufactured housing. Brandon's Big 4 and personal investing experiences allow him to provide unique advice to each of his clients.

    Aaron B. Investor from Indianapolis, Indiana
    Replied about 4 years ago
    Brandon Hall, that was an excellent article. It provided some very insightful tips. Wondered your thoughts on the following. I have been using the same CPA Firm, in PA, to file my taxes. I am planning to start investing in Indianapolis, Indiana, should I seek out a CPA firm in the city/State I am investing? I was thinking federal rules are nationwide; however, I wondered about the differences in State law.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Aaron – thanks for reading and commenting. You do not need a CPA in the state you are investing unless your current firm specifically says they do not service that state. Most CPAs will service every state though. State laws do differ from state to state, it’s important to have a CPA that is knowledgeable about varying state laws that will affect you.
    Jason Clapp from South Amana, Iowa
    Replied about 4 years ago
    Very helpful, thank you. I have a first meeting with a CPA tomorrow, so this is also timely for me.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Good luck Jason!
    Jason Clapp from South Amana, Iowa
    Replied about 4 years ago
    Very helpful, thank you. I have a first meeting with a CPA tomorrow, so this is also timely for me.
    Russell Brazil Real Estate Agent from Rockville, MD
    Replied about 4 years ago
    You know I dont mind paying taxes so much… is just the organizing, time and effort it takes to file them. I would be all for paying more taxes if it were simpler.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    It does take time to organize your docs, but the more organized you are, the more likely a CPA will be able to find loopholes you can take advantage of!
    Jerry W. Investor from Thermopolis, Wyoming
    Replied about 4 years ago
    Brandon, very good article. Thanks for taking the time to share it. As you can guess there is a lot of paperwork for my rentals. I have never been sent a tax organizer. I have used the same firm for about 25 years.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Thanks Jerry – what does your firm do instead of an organizer?
    Katie Rogers from Santa Barbara, California
    Replied about 4 years ago
    Even better than asking the CPA , “Hey I closed on a 4-plex yesterday. Anything I should know taxwise?” is “Hey, I am Planning to make an offer on a 4-plex soon. Anything I should know tax wise. The best tax planning happens before the fact. Summing up the various categories of income and expenses according to the categories actually on the tax forms makes preparing the tax return so much easier
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Thanks Katie!
    lin van
    Replied about 4 years ago
    This is my least favorite time of year. I have a prop. management co. handle my 6 SFR. They send year end statement to me. I include it in my CPA packet. I also fill out a tax organizer for my CPA. I now pay big ticket items for the rentals on my own, ….property taxes, insurance fees, large contractor fees. My PM offers pay all of these, they charge 6% of rental income and bill for minor repairs at major prices. Do you have a suggestion ? Let it all billing to PM? Thank you for your info. BP has been very helpful to me.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Hey Lin – thanks for reading and posting a question. Is the problem that you don’t have time for the admin work or that the CPA you are using seems to be disorganized?
    Dmitriy Fomichenko Solo 401k Expert from Anaheim Hills, CA
    Replied about 4 years ago
    Brandon, thanks for sharing! I’m glad I’m already doing all those.
    Brandon Hall CPA from Raleigh, NC
    Replied about 4 years ago
    Of course – thanks for reading!
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied almost 4 years ago
    If PM seems to be overcharging you for repairs (though maybe undercharging for management unless they are very high rent properties), why on earth would you trust them with your big-ticket items?