Tax Strategist and Accountants?

Question

Hello all,

In summary, I am a new real-estate investor. I am working to close on my second property this year. My market is rentals in Philadelphia, by year end I will have two triplexes (6 units total).

I am a high earning W2 employee and switching to independent contractor (hopefully earning more).

Again, I am new to real-estate, so I am understanding that the passive income from investment properties starts off as somewhat minimal and is not going to make me rich overnight. But my understanding is also that there can be tremendous tax benefits / write offs when it comes to real-estate.

I am looking for more guidance from professionals on how to structure my investments and how I could potentially harness the power of depreciation and write-offs to legally save money on my active earned income. I know this is feasible (having to meet specific criteria) but I just do not know where to start. My hope is to continue investing heavily into properties and utilizing their tax benefits!

If anyone could refer me to a good tax strategist and accountant, or had any personal wisdom on this topic, I would love to discuss further!

Daniel H. · Answer

@Denver McClure thank you for the referral

Max Emory · Answer

@Daniel H., I'll throw @Michael Plaks as a Real Estate Investing-savvy CPA in the mix if you're still searching!

Nate Meeker · Answer

Congrats, @Daniel H.! I have a few clients in PA. As a W2 employee, your options are limited to the STR Loophole most likely. Some rare cases can W2 employees qualify as a real estate professional. At any rate, you can still grow a tax free rental portfolio and work towards achieving one of the statuses mentioned above to turn passive losses into active and start offsetting some of your other income.

Basit Siddiqi · Answer

Be mindful that if you are doing business in Philadelphia(both as an independent contractor and as a person who has rentals), that you may be subject to Philadephia taxation.

Philadelphia may require you to file and pay taxes on the BIRT(Business Income Receipts Tax) and the NPT(Net Profits Tax).

I often find these forms to be missed by accountants not local to the tri-state area.

Best of luck!

Denver McClure · Answer

Hey Daniel, glad to see you've made the successful jump into RE! I highly suggest speaking with a CPA that understands all aspects of RE investing. You'll need a firm grasp on the tax-benefits and liquidity strategies to grow your portfolio more efficiently.

I recommend reaching out to @Jeff Nash, he would be a great asset for you.

Account Closed · Answer

Hey @Daniel H.,

Congrats on getting into real estate investing!

As accountants on BP, we are not allowed to self-promote. To help you in your search: be sure to find an accountant that is willing to grow with you, and is not too high priced fee wise. Not to low either, you don't want to go with someone who is just focused on price as this is a quality of a not so great accountant. Accountants are in such demand, that the best are not even accepting clients half the time.

The other problem I see often with accountants on here is that they specialize in larger investors, and have really high prices when you as a smaller investor do not need all the bells and whistles.

Another thing I see is folks thinking they need to have a tax professional in their state. We as a firm have investors working with us who have rental properties all over the US big and small.

Finding a real estate-focused tax professional and one who can help with advisory and grow with you would be my suggestion to focus your efforts on finding. Best of luck in your search!

Account Closed · Answer

Hey @Daniel H.,

We as tax pro's are not allowed to promote ourselves directly due to BP's rules.

To help you in your search: be sure to find an accountant that is willing to grow with you, and is not too high priced fee wise. Not to low either, you don't want to go with someone who is just focused on price as this is a quality of a not so great accountant. Accountants are in such demand, that the best are not even accepting clients half the time.

The other problem I see often with accountants on here is that they specialize in larger investors, and have really high prices when you as a smaller investor do not need all the bells and whistles.

Another thing I see is folks thinking they need to have a tax professional in their state. We as a firm have investors working with us who invest in rental properties all over the US for example big and small.

Best of luck in your search!

Chris Pelc · Answer

Hi Daniel!
I just connected with a financial advisor/ CPA at a local meetup in King of Prussia. I will likely using his services for my personal finances. If you would like, i'd be happy to send you his contact to maybe see if his services are best for you.

Tax Strategist and Accountants?

Tax Strategist and Accountants?

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