Small business accountant vs accountant with REI background.

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Small business accountant vs accountant with REI background.

Kevin S.
Member since 2024 · 400 posts · 240 votes

Hello everyone. I am a small business owner and already have an accountant for past 25 yrs. I am new to RE investment and starting out. My question (probably more relevant to those in similar situation of being small business owner getting into REI) is : Are 'regular' accountants well versed in RE investor needs? If not, do you use 2 accountants? Do I transfer my regular accounting to the one with RE experience? How do I avoid paying 2 accountants? Do RE accountant (if there is such) work with regular accountants? How do RE accountant differ in service and fees? Anyone been down this road? TIA.

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Jon K.
Rental Property Investor · Perry Hall, MD · Member since 2016 · 587 posts · 598 votes
2y

My personal experience was that there is a difference between a "Regular" accountant or bookkeeper and one who understands real estate. Years of headaches and thousands of dollars in expenses from having someone untangle what the last guys did later, I can now confidently say to seek out those who have real estate knowledge.

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  • Jon K.
    Rental Property Investor · Perry Hall, MD · Member since 2016 · 587 posts · 598 votes
    2y

    My personal experience was that there is a difference between a "Regular" accountant or bookkeeper and one who understands real estate. Years of headaches and thousands of dollars in expenses from having someone untangle what the last guys did later, I can now confidently say to seek out those who have real estate knowledge.

    2Reply
  • Glen Wiley
    Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
    2y

    Real estate specific tax law is very complicated and dynamic. We moved from a non-RE specialist to a RE specialist accountant and reduced our taxes by tens of thousands of dollars. Find an expert. We really like ProVision - big firm, lots of resources, they appear to do a good job staying on top of changes.

    1Reply
  • Kevin S.
    OP
    Member since 2024 · 400 posts · 240 votes
    2y
    Quote from @Glen Wiley:

    Real estate specific tax law is very complicated and dynamic. We moved from a non-RE specialist to a RE specialist accountant and reduced our taxes by tens of thousands of dollars. Find an expert. We really like ProVision - big firm, lots of resources, they appear to do a good job staying on top of changes.


     Thank you Glen for your input as well as recommendation of ProVision.  Will definitely check them out.

    0Reply
  • Sean O'KeefePro Member
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y

    Interesting, thanks for sharing your perspective.

    [email protected]628-241-0888
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  • Kevin S.
    OP
    Member since 2024 · 400 posts · 240 votes
    2y
    Quote from @Jon K.:

    My personal experience was that there is a difference between a "Regular" accountant or bookkeeper and one who understands real estate. Years of headaches and thousands of dollars in expenses from having someone untangle what the last guys did later, I can now confidently say to seek out those who have real estate knowledge.


     Thank you Jon for your input.  Should I still keep the 'regular' accountant for everything non-RE?  Or will the RE accountant become a one-stop shop?  

    0Reply
  • Evan Tuuk
    Member since 2021 · 32 posts · 13 votes
    2y
    Quote from @Kevin S.:
    Quote from @Jon K.:

    My personal experience was that there is a difference between a "Regular" accountant or bookkeeper and one who understands real estate. Years of headaches and thousands of dollars in expenses from having someone untangle what the last guys did later, I can now confidently say to seek out those who have real estate knowledge.


     Thank you Jon for your input.  Should I still keep the 'regular' accountant for everything non-RE?  Or will the RE accountant become a one-stop shop?  


    I had a "regular" accountant doing my personal taxes until I had another RE accountant take a look at my previous tax return. I had been W2 but that return was the first year I was fully self-employed (and mostly non-real estate) and the "regular" accountant totally missed so many deductions that I had because I was self-employed. The next year I only made slightly more money but my new accountant was able to slash my tax bill nearly in half simply because he understood my situation more fully. I would definitely consider at least interviewing several accountants and ask for their opinions and experience levels with everything you do.

    1Reply
  • Kevin S.
    OP
    Member since 2024 · 400 posts · 240 votes
    2y

    Thank you Evan.  Are you in Florida?

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  • Evan Tuuk
    Member since 2021 · 32 posts · 13 votes
    2y
    Quote from @Kevin S.:

    Thank you Evan.  Are you in Florida?


     Of course! I am in Texas. 

    0Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    2y

    There are different tax codes / concepts when it applies to real estate investors vs those with a small business

    Small business
    A) SEP IRA / Solo401K
    B) S-Corp or not

    Real Estate
    A) Real Estate Professional Status
    B) 1031 exchange

    There are also some concepts that apply to both

    Small business / Real Estate
    A) Home Office Deduction
    B) 199A Qualified Business Income deduction

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
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    1Reply
  • Jake BakerBusiness Member
    Flipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 695 votes
    2y

    @Kevin S.

    Very interesting perspective. Either way, I recommend having a real estate accountant/bookkeeper for your real estate. 

    [email protected]
    BookkeepingRE - Bookkeeping for Real Estate & Service-Based Businesses58 Reviews
    WebsiteView Page
    1Reply
  • Kevin S.
    OP
    Member since 2024 · 400 posts · 240 votes
    2y

    Thanks Jake.  Advice taken.  Do I keep 2 accountants, the regular accountant for my small business and a RE accountant as well?  For those who have small business and are RE investors, please chime in.  Thanks.  

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