CPA vs Tax Strategist
Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
CPA vs Tax Strategist
Most Popular Reply
Rental Property Investor · Worcester, MA · Member since 2018 · 131 posts · 135 votes
3y@Rich Hupper I'm in the exact same boat, also in Massachusetts. Have had the same CPA for years and he has been fine, but doesn't try to help me save.
I heard something on a podcast recently that really stuck with me, something along the lines of "there are 2 types of CPA's, ones that work for you, and ones that work for the IRS." With mine it feels like the latter. It feels like all he is concerned with is proper filing, when I ask questions about ways to save he usually shrugs them off. I recently asked him his thoughts on doing a cost seg study and he didn't even know what it was.
I'm looking for a new CPA more real estate specialized in Massachusetts as well. Let me know if you find soneone you like and I'll do the same!
29 Replies
- 3yAndrew BoscoBusiness MemberRental Property Investor · NH · Member since 2023 · 443 posts · 417 votes
CPAs - depending on their workload - are dealing with a wide variety of clients. Go to local meet-ups and network. Find local investor friendly CPAs and also a cost segregationist. You may find both in the same office. In my mind, cost segregationist/tax strategists focus on depreciation schedules whereas CPAs are trying to get more of your money back to you from a tax perspective with a much wider lens. Tax specialists have a different fine comb. Personally, I use both. I see you're in Boston and recommend Jeff Hiatt in southern nh - PM me if you want his email/contact. Investor friendly CPAs typically go to meet-ups, so check with them.
Andrew Bosco - Candor Investment Group529 Reviews - 3yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
1. Find a CPA who does several apartment complexes and other real estate. Talk with the largest commercial broker in you area and ask for recommendations
2. Most tax preparers and they don’t have to be a cpa won’t be strategist.
3. Don’t stay local on your search for a strategist.
4. Grab some books and start reading. For example if you have kids? There is a REI tax strategy. Send them to college or buy their first car for free and get an REI tax deduction.
5. Are you deducting your water hose purchase for your personal house? How about the wheelbarrow. Strategize. Electric, internet, etc.Yes 1031, installment sales and purchases, cost seg, etc. But there are a lot more angles.
Use the lookup on my name and the post. What happens if you die. Do a wholistic assessment on how your business is set up.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Henry Clark:
1. Find a CPA who does several apartment complexes and other real estate. Talk with the largest commercial broker in you area and ask for recommendations
2. Most tax preparers and they don’t have to be a cpa won’t be strategist.
3. Don’t stay local on your search for a strategist.
4. Grab some books and start reading. For example if you have kids? There is a REI tax strategy. Send them to college or buy their first car for free and get an REI tax deduction.
5. Are you deducting your water hose purchase for your personal house? How about the wheelbarrow. Strategize. Electric, internet, etc.Yes 1031, installment sales and purchases, cost seg, etc. But there are a lot more angles.
Use the lookup on my name and the post. What happens if you die. Do a wholistic assessment on how your business is set up.
Thanks for the reply Henry. I will reach out to some of the commercial brokers.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
I currently have an LLC that owns my flips I do, and one 3 unit building which is currently under development. I just want to make sure I am paying as little as possible and I have been using the same CPA for many years so I don't know any better.
- 3yLinda WeygantPro MemberInvestor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
Quote from @Rich Hupper:
I currently have an LLC that owns my flips I do, and one 3 unit building which is currently under development. I just want to make sure I am paying as little as possible and I have been using the same CPA for many years so I don't know any better.
BiggerPockets has a CPA referral page:
https://www.biggerpockets.com/...
Most of the folks on that link are going to be great strategists as well.
- 3yLinda WeygantPro MemberInvestor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
Quote from @Rich Hupper:
I currently have an LLC that owns my flips I do, and one 3 unit building which is currently under development. I just want to make sure I am paying as little as possible and I have been using the same CPA for many years so I don't know any better.
BiggerPockets has a CPA referral page:
https://www.biggerpockets.com/...
Most of the folks on that link are going to be great strategists as well.
- 3yBonnie Griffin KaakePro MemberReal Estate Consultant · Denver, CO · Member since 2021 · 666 posts · 389 votes
@Rich Hupper There are some great CPAs on BP. At the same time, most good CPAs are so busy, they don't have time to add clients for strategy sessions. We are not graduating enough students from college with accounting degrees and going on to be CPAs to fill the pipeline. I am an inactive commercial RE broker, invest in commercial properties and for the last 7 years have been specifically trained to strategize with clients and their CPAs to maximize tax benefits for their RE investors and add cash-flow.
The tax benefits available to investors in commercial and residential real estate are very complex. A good example is that the vast majority of depreciation schedules on STRs being done be CPAs/tax professionals are being done incorrectly right now. You may find you will do better with a tax strategist/consultant and a CPA/tax professional. We do work together very well.
- Rental Property Investor · Worcester, MA · Member since 2018 · 131 posts · 135 votes3y
@Rich Hupper I'm in the exact same boat, also in Massachusetts. Have had the same CPA for years and he has been fine, but doesn't try to help me save.
I heard something on a podcast recently that really stuck with me, something along the lines of "there are 2 types of CPA's, ones that work for you, and ones that work for the IRS." With mine it feels like the latter. It feels like all he is concerned with is proper filing, when I ask questions about ways to save he usually shrugs them off. I recently asked him his thoughts on doing a cost seg study and he didn't even know what it was.
I'm looking for a new CPA more real estate specialized in Massachusetts as well. Let me know if you find soneone you like and I'll do the same!
- 3yBryan MartinBusiness MemberAccountant · Springfield, IL · Member since 2022 · 189 posts · 100 votes
Quote from @Rich Hupper:
I am trying to figure out this difference between these two pros. I saw a Youtube video about this topic. I am also concerned my CPA may not have enough knowledge how to save me the most in taxes, and or educate me on how to structure my entities properly.
What is the difference between these pros. I know CPAs are licensed but about about Tax Strategists? Im also looking for a new tax pro in my area if anyone is in Massachusetts.
Great post. I'm a CPA and work with RE investors and other small businesses. And to put things in perspective, most of my clients come to me between January-April and our office gets slammed with visitors, calls, emails. And most the time, it's too late to do much as they're asking about the prior year.
If you're wanting to strategize with your CPA, I would suggest asking them the best time of the year to do so and schedule an appointment for then, because come May, my schedule opens up quite a bit and I have a lot more time for the advisory services from May-December AND they're much more valuable to the client at that time because they can still act on our recommendations to lower your tax bill.
- 3yBrett MerrillBusiness MemberRental Property Investor · Ludlow, MA · Member since 2016 · 114 posts · 48 votes
Hi @Rich Hupper,
A tax strategist is a professional who specializes in analyzing tax laws, creating tax-saving strategies, and providing customized tax planning solutions for individuals and businesses. They focus solely on minimizing tax liability and maximizing tax efficiency for their clients.
On the other hand, a CPA, or certified public accountant, is an accounting professional who has earned a state-issued license to practice accounting. They can offer a wide range of accounting services, including tax preparation, auditing, financial reporting, and consulting. While they are knowledgeable about tax laws, they have a broader focus than a tax strategist and may not specialize in tax planning for real estate investors.
In the context of real estate investing, a tax strategist may focus on identifying deductions and credits specific to real estate investment, such as depreciation, rental property expenses, and 1031 exchanges. They may also develop a strategy to convert personal property into rental property, use real estate losses to offset other income, and structure transactions in a way that maximizes tax benefits.
A CPA may provide tax preparation services for real estate investors, ensure compliance with tax laws, and provide accounting advice on issues related to real estate transactions. However, they may not have the same level of focus on developing customized tax strategies specific to real estate investment as a tax strategist would.
Overall, while there may be some overlap in the services provided by a tax strategist and a CPA when it comes to real estate, a tax strategist may be better suited for those who want to develop customized tax planning solutions to maximize their real estate investment returns. - Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
CPA's
- 3yLien VuongBusiness MemberReal Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
One is proactive v the other is reactive
The Elle Group5153 Reviews - Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3yThanks Linda I will check this out.
Quote from @Linda Weygant:
Quote from @Rich Hupper:
I currently have an LLC that owns my flips I do, and one 3 unit building which is currently under development. I just want to make sure I am paying as little as possible and I have been using the same CPA for many years so I don't know any better.
BiggerPockets has a CPA referral page:
https://www.biggerpockets.com/...
Most of the folks on that link are going to be great strategists as well.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Bonnie Griffin Kaake:
@Rich Hupper There are some great CPAs on BP. At the same time, most good CPAs are so busy, they don't have time to add clients for strategy sessions. We are not graduating enough students from college with accounting degrees and going on to be CPAs to fill the pipeline. I am an inactive commercial RE broker, invest in commercial properties and for the last 7 years have been specifically trained to strategize with clients and their CPAs to maximize tax benefits for their RE investors and add cash-flow.
The tax benefits available to investors in commercial and residential real estate are very complex. A good example is that the vast majority of depreciation schedules on STRs being done be CPAs/tax professionals are being done incorrectly right now. You may find you will do better with a tax strategist/consultant and a CPA/tax professional. We do work together very well.
Hi Bonnie are these Tax Strategist licensed or do they have some kind of degree? Or are they self taught?
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Brandon Gale:
@Rich Hupper I'm in the exact same boat, also in Massachusetts. Have had the same CPA for years and he has been fine, but doesn't try to help me save.
I heard something on a podcast recently that really stuck with me, something along the lines of "there are 2 types of CPA's, ones that work for you, and ones that work for the IRS." With mine it feels like the latter. It feels like all he is concerned with is proper filing, when I ask questions about ways to save he usually shrugs them off. I recently asked him his thoughts on doing a cost seg study and he didn't even know what it was.
I'm looking for a new CPA more real estate specialized in Massachusetts as well. Let me know if you find soneone you like and I'll do the same!
Hey Brandon, Yes Its one of those situations where you are wondering if the grass is greener somewhere else, only because this CPA is all you have known. I have one entity that is set up as a partnership so I get a k1. I get 50% of all profits sent to my personal return. Most of my income has been from flips. However next year things will change as I am now receiving rental income, flip income, and regular employment income.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Brett Merrill:
Hi @Rich Hupper,
A tax strategist is a professional who specializes in analyzing tax laws, creating tax-saving strategies, and providing customized tax planning solutions for individuals and businesses. They focus solely on minimizing tax liability and maximizing tax efficiency for their clients.
On the other hand, a CPA, or certified public accountant, is an accounting professional who has earned a state-issued license to practice accounting. They can offer a wide range of accounting services, including tax preparation, auditing, financial reporting, and consulting. While they are knowledgeable about tax laws, they have a broader focus than a tax strategist and may not specialize in tax planning for real estate investors.
In the context of real estate investing, a tax strategist may focus on identifying deductions and credits specific to real estate investment, such as depreciation, rental property expenses, and 1031 exchanges. They may also develop a strategy to convert personal property into rental property, use real estate losses to offset other income, and structure transactions in a way that maximizes tax benefits.
A CPA may provide tax preparation services for real estate investors, ensure compliance with tax laws, and provide accounting advice on issues related to real estate transactions. However, they may not have the same level of focus on developing customized tax strategies specific to real estate investment as a tax strategist would.
Overall, while there may be some overlap in the services provided by a tax strategist and a CPA when it comes to real estate, a tax strategist may be better suited for those who want to develop customized tax planning solutions to maximize their real estate investment returns.Thanks Brett this is what I figured. Now it just comes down to finding one.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y:D
Quote from @Lien Vuong:
One is proactive v the other is reactive
- 3yBonnie Griffin KaakePro MemberReal Estate Consultant · Denver, CO · Member since 2021 · 666 posts · 389 votes
Quote from @Rich Hupper:
Quote from @Bonnie Griffin Kaake:
@Rich Hupper There are some great CPAs on BP. At the same time, most good CPAs are so busy, they don't have time to add clients for strategy sessions. We are not graduating enough students from college with accounting degrees and going on to be CPAs to fill the pipeline. I am an inactive commercial RE broker, invest in commercial properties and for the last 7 years have been specifically trained to strategize with clients and their CPAs to maximize tax benefits for their RE investors and add cash-flow.
The tax benefits available to investors in commercial and residential real estate are very complex. A good example is that the vast majority of depreciation schedules on STRs being done be CPAs/tax professionals are being done incorrectly right now. You may find you will do better with a tax strategist/consultant and a CPA/tax professional. We do work together very well.
Hi Bonnie are these Tax Strategist licensed or do they have some kind of degree? Or are they self taught?
Excellent question, Rich. Select carefully. There is a wide spectrum of qualifications. Our company only hires degreed individuals and then spends an enormous amount of time training them before they are allowed to work with clients. Ongoingly, we have twice weekly meetings to keep us up-to-date. Nevertheless, some of us are more qualified than others. You should always ask questions of whoever you are considering or choosing to work with. Some companies only see their reps as salespeople. We are consultants. I am happy to let my clients and the CPAs/tax professionals I work with know my background. We have a huge team of professionals at our home office that are always at the ready to answer any questions I cannot answer. The IRS regulations are very complex in this area and need specialists to interpret them. I teach CPAs how to leverage the tax benefits available for their clients.
- Real Estate Agent · Greater Boston · Member since 2023 · 6 posts · 1 vote3y
I am a former tax attorney and would classify myself as a "tax strategist." I could design a tax efficient structure for a business (cross-boarder or domestic), however, I could not prepare that same business' tax return. I would expect any good CPA to be able to perform similar functions to a strategist, for example, helping you determine entity type to use as your investment vehicle (partnership, disregarded entity, corporation (C or S) or partnership).
- Attorney · Boston, MA · Member since 2023 · 140 posts · 75 votes3y
@Rich Hupper this is a great question!
Technically speaking, a “strategist” is just branding. As a lawyer focusing on tax planning, l can say I’m a strategist as well along with my CPA partner but its more of a way to show prospects what we focus on.
However, you’ll want to look for companies who are focused on year round proactive planning for RE investors vs a pure 1X compliance model in your situation. Hope this helps!
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @John Malone:
@Rich Hupper this is a great question!
Technically speaking, a “strategist” is just branding. As a lawyer focusing on tax planning, l can say I’m a strategist as well along with my CPA partner but its more of a way to show prospects what we focus on.
However, you’ll want to look for companies who are focused on year round proactive planning for RE investors vs a pure 1X compliance model in your situation. Hope this helps!
Hi John thanks for reaching out. I will DM you and we can talk about what you do. I need a new accountant and strategist.
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3yHi Lucas I will DM you directly. Thank you
Quote from @Lucas Caruso:
I am a former tax attorney and would classify myself as a "tax strategist." I could design a tax efficient structure for a business (cross-boarder or domestic), however, I could not prepare that same business' tax return. I would expect any good CPA to be able to perform similar functions to a strategist, for example, helping you determine entity type to use as your investment vehicle (partnership, disregarded entity, corporation (C or S) or partnership).
- Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes3y
Quote from @Bonnie Griffin Kaake:
Quote from @Rich Hupper:
Quote from @Bonnie Griffin Kaake:
@Rich Hupper There are some great CPAs on BP. At the same time, most good CPAs are so busy, they don't have time to add clients for strategy sessions. We are not graduating enough students from college with accounting degrees and going on to be CPAs to fill the pipeline. I am an inactive commercial RE broker, invest in commercial properties and for the last 7 years have been specifically trained to strategize with clients and their CPAs to maximize tax benefits for their RE investors and add cash-flow.
The tax benefits available to investors in commercial and residential real estate are very complex. A good example is that the vast majority of depreciation schedules on STRs being done be CPAs/tax professionals are being done incorrectly right now. You may find you will do better with a tax strategist/consultant and a CPA/tax professional. We do work together very well.
Hi Bonnie are these Tax Strategist licensed or do they have some kind of degree? Or are they self taught?
Excellent question, Rich. Select carefully. There is a wide spectrum of qualifications. Our company only hires degreed individuals and then spends an enormous amount of time training them before they are allowed to work with clients. Ongoingly, we have twice weekly meetings to keep us up-to-date. Nevertheless, some of us are more qualified than others. You should always ask questions of whoever you are considering or choosing to work with. Some companies only see their reps as salespeople. We are consultants. I am happy to let my clients and the CPAs/tax professionals I work with know my background. We have a huge team of professionals at our home office that are always at the ready to answer any questions I cannot answer. The IRS regulations are very complex in this area and need specialists to interpret them. I teach CPAs how to leverage the tax benefits available for their clients.
Unfortunately that is what I am starting to see. I have been with my CPA for 5 years but all she does is collect my statements and prepares the returns. She never offers advice or suggestions how to structure my entities to reduce taxes or even open retirement accounts / health accounts.
- 3yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
What I noticed is that you posted your question 3 months ago stating you were looking, and you got a lot of good feedback and a link to BP directory of tax pros. Yet, 3 months later, you're still stating that you need a new strategist. Apparently not much progress in 3 months.
Now is mid-year, and many of us are not taking new clients for this year anymore. Your choices are dwindling the longer you wait. You might have to either settle for whoever is still available or wait until late in the year to start looking for next year's switch.
Here're several older threads that may be helpful.
https://www.biggerpockets.com/...
https://www.biggerpockets.com/...
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