New investor should I get a CPA?

Question

I am a new investor in Baltimore City. Just bought my first property and I plan to do a house hack while doing some improvements on the property. Should I get a CPA to help me with my taxes this year or should I continue to use online tax tools until I have acquired more properties? What do investors normally do? Is there like a general rule of thumb?

Thanks!!

Garrett Hawk · Answer

Hello Lian,

I have discovered that it's good to use a CPA that is experienced in real estate investing. There are some strategies that could be overlooked including "accelerated depreciation". That has been the biggest tax deduction that I missed starting out.  Having this  knowledge early on, will help you scale faster.

Let me know if you'd like anymore help!

Basit Siddiqi · Answer

@Lian Orraca RosarioWelcome to biggerpockets and congratulations on the purchase of your investment property!

Purchasing an investment property increases the level of difficulty of your tax return.Purchasing a house-hack is even more difficult.To make it even more difficult - you plan to make improvements so you have to determine which costs are currently expensed and which are capitalized.Not only have you acquired an investment property but you also acquired a personal residence.As a result, direct expenses towards your investment property and indirect expenses are deductible business expenses that can be used to decrease your net income from rental activities.With all that is said - you are trying to operate a business so I would hire professionals to help you with your tasks. Obviously, I have some bias as I am a CPA.

Ned Carey · Answer

@Lian Orraca Rosario you can do it yourself when it is small and simple. However a small decision can make a big difference in tax consequences even in the beginning. So I recommend you get good tax planning advice from the start.

I our area I recommend Jeff Stoller From  Goodwich Stoller and Associates.

Lian Orraca Rosario · Answer

Thanks so much for the replies. I will be looking for a local CPA that can help me out. Will begin by contacting Jeff Stoller which is in the area and was recommended by

@Ned Carey.

George Blower · Answer

@Lian Orraca Rosario

Welcome to Bigger Pockets. You have come to the right place to network with others.

Ozzy Sirimsi · Answer

If you want to continue using tax tools, reading "tax strategies" could be helpful. I would suggest to read it, you can get good ideas.

Mike McCarthy · Answer

TurboTax does a pretty good job of walking you through reasonably simple taxes.  If you don't have too many complicated details.  You should be able to include your rental receipts and such.

But like anything investing.  You need to decide if you want to learn to do your own taxes (which is a positive thing to learn) or if it would be better to pay the couple hundred dollars and have someone else do it - and focus your efforts on learning something else investing specific.

For me personally, I appreciated doing my own taxes for a handful of years until it started getting complicated enough that I decided that someone else could do it better than me.

Ahad Ali · Answer

It never actually hurts, but rather always helps, to have a CPA file your taxes. If you're not looking to outsource the job each year, then simply ask a lot of questions during your consultation and get an understanding before you tackle it yourself the following year. Let me know if you're willing to work with a remote CPA.

New investor should I get a CPA?

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