Homeowner · Moreno Valley, CA · Member since 2023 · 7 posts · 8 votes
Hi,
New to BP and this forum. I got my first property at the end of 2019. I started house hacking this year. I started listening to BP and reading the books at the end of last year. Which I am super grateful for because I have done a lot of remodeling of this house. I was reading the Tax Strategies book and I think I have many things I may write off. I usually go to H&R Block for my tax needs but after reading the Tax Strategies book I think that might not by my best course of action this year since they aren't specialized in real estate. I would love to hear the community's wisdom.
Accountant · Dallas, TX · Member since 2016 · 161 posts · 75 votes
3y
I'm a CPA, I generally would not recommend a CPA for a simple tax configuration as this. When your return is unmanageable on your own you should hire a tax professional. I would never use H&R Block over a local tax professional since their office isn't typically open year round.
Accountant · Dallas, TX · Member since 2016 · 161 posts · 75 votes
3y
I'm a CPA, I generally would not recommend a CPA for a simple tax configuration as this. When your return is unmanageable on your own you should hire a tax professional. I would never use H&R Block over a local tax professional since their office isn't typically open year round.
Real Estate Agent · Seattle, WA · Member since 2017 · 150 posts · 80 votes
3y
I've wondered the same question and the advice others tell me is you typically don't need one until you have at least 2-3 properties. Your taxes shouldn't be too complicated with one property. I'm not a CPA though and I know many offer free consultations so you can always ask them for their thoughts.
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
3y
As a CPA, I'm going to disagree with the others - and not because of what I do.
I've been helping real estate investors with their taxes for decades. Often times, the first thing I do when I'm reviewing a self prepared tax return (or even a professional one), is determine if we need to amend the prior year's due to errors. Sometimes we can correct errors in a current year, but the forms to do so are fairly complicated.
If you (or your tax preparer) miscalculates basis or depreciation; or mistakenly deducts something that needed to be depreciated (or depreciates something that could have been deducted), getting everything corrected is expensive and time consuming.
Start as you mean to go on. A good CPA will not only make sure you're compliant and reduce your audit risk, but may also be able to offer strategies and insight to save you taxes in the current as well as future years.
Real Estate Agent · Southern California · Member since 2019 · 681 posts · 281 votes
3y
@Joel Borja I would say not for the first one. As you scale to the second I would suggest it to make sure that you are maximizing the total return on your investment!
Often times you'll want to make sure your CPA is specialized in your area of investment/interest, so including virtual CPAs in your search, may make sense.
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
3y
A good CPA who is knowledgeable in the particular industry niche that one is in will likely save you a great deal more than spent in fees. My dad was a CPA for farmers and was highly specialized. Great in that area but okay in others. Specialization is key. The riches are in the niches! Find a CPA that is knowledgeable of house hacking AND is open to consultation so that you can save money now and in the future.
New to BP and this forum. I got my first property at the end of 2019. I started house hacking this year.
Househacking can mean different things. If you're in a house with roommates trying to get sophisticated with improvements vs repairs and or an office is different than a plex.
I would say it's worth a consult with a real estate focused CPA or EA but either way, keep it simple.
Very useful to get a CPA early, you want to strategize your growth in it's infancy.
After looking at the replies and thinking it over I agree. I don't want to waste time by making mistakes on my taxes because I am not a tax professional. Nor so I want to miss out on strategies.
As a CPA, I'm going to disagree with the others - and not because of what I do.
I've been helping real estate investors with their taxes for decades. Often times, the first thing I do when I'm reviewing a self prepared tax return (or even a professional one), is determine if we need to amend the prior year's due to errors. Sometimes we can correct errors in a current year, but the forms to do so are fairly complicated.
If you (or your tax preparer) miscalculates basis or depreciation; or mistakenly deducts something that needed to be depreciated (or depreciates something that could have been deducted), getting everything corrected is expensive and time consuming.
Start as you mean to go on. A good CPA will not only make sure you're compliant and reduce your audit risk, but may also be able to offer strategies and insight to save you taxes in the current as well as future years.
Best of luck to you!
Thank you! I really appreciate your input. I agree I don't want the hassle or headache of miscalculations or errors. I will find a CPA that specializes in real estate. Mistakes will happen but if I can minimize it by going from self-preparing to a specialized professional, I will do it. Thank you again!
As a CPA, I'm going to disagree with the others - and not because of what I do.
I've been helping real estate investors with their taxes for decades. Often times, the first thing I do when I'm reviewing a self prepared tax return (or even a professional one), is determine if we need to amend the prior year's due to errors. Sometimes we can correct errors in a current year, but the forms to do so are fairly complicated.
If you (or your tax preparer) miscalculates basis or depreciation; or mistakenly deducts something that needed to be depreciated (or depreciates something that could have been deducted), getting everything corrected is expensive and time consuming.
Start as you mean to go on. A good CPA will not only make sure you're compliant and reduce your audit risk, but may also be able to offer strategies and insight to save you taxes in the current as well as future years.