How has your CPA saved you money?

Question

I tried using a CPA two years ago when I first had rental properties to account for.  He did an okay job, but nothing that I could not have done myself.  He also made a mistake that if I had not caught, would've cost me a couple of thousand bucks.  In the end, I felt it was a bigger hassle putting all of my information in a different format for him to file versus doing it myself.  I did not feel he delivered value equivalent to his fee.

I'm trying to understand how CPAs can add value besides doing an accurate tax filing.  I'm meticulous with my accounts and am confident that I can file an accurate tax return myself.

What I'm looking for is someone who can think strategically and provide valuable advice.  I want to know what I don't know.

How has your CPA helped you?  Have they come up with a better way for you to structure your business entities?  Have they found a way for you to put more money in a retirement account?

Basically, I want to hear what a good CPA does so I know what to look for in one.  Or, if owning rental properties is so straightforward that it requires nothing beyond filing accurate tax returns, that's fine too.  I'll know there are no efficiencies to be gained by searching for a "good" CPA.

Ali Boone · Answer

I'd call Amanda Han (she writes blogs on here) with Keystone CPA. They are out of Orange, CA but they can work with anyone virtually. I've used them for years and been really pleased.

The trick is finding a CPA who works predominantly with real estate investors. Most don't. Makes a huge difference.

Michael Germinario · Answer

Hi @Paul C.

I agree with @Nicole W. in that you probably just need to find a different CPA.  It's important to find one that specializes in Real Estate.  The tax code is insanely massive and complex so a general CPA that claims they can do everything will most likely get you mediocre results.  Accounting in general is a huge field, and the CPA's that specialize are the ones that can deliver value to your business.

Happy Investing,

Mike

Paul C. · Answer

Thanks, Nicole.  Sure, please send me a PM with his contact info.  I'm always willing to explore whether I can be doing things better.

Nicole A. · Answer

I guess it depends how comfortable and knowledgeable you are with taxes. It's not just about having organized, meticulous accounts. It's about knowing all the loopholes and laws. It's about knowing how to toy around with things to make it so you get the best result possible.

We have a LLC and my partner was confident that I could handle doing the LLC taxes on my own via TurboTax after he heard the price of a CPA. What a nice compliment for him to have that faith in my abilities, but I was more realisitc. I did give it a try though, and I knew the result was very wrong. I talked him into letting a CPA do it.Our CPA specializes in real estate investing, which I felt was a necessary specialty to have. He did each of our personal taxes and the LLC taxes for $800 and we got a huge refund. He gives us tips on what to do for the following year. I can come to him any time of the year with questions and he has suggestions. I think it's well worth it.

I don't think this is as straight forward as you believe unless you have a lot more knowledge in taxes than you've stated. You may just need a new CPA. I'm happy to send his contact info to you if you'd like; I believe he has clients from several states.

CK Hwang · Answer

Got to say I am very very happy with my CPA. She managed to find depreciations I didn't take when I first started my own accounts and managed to get back about $6K from the IRS for me.

Money aside, I love that my accounting is almost totally hands off. Whenever the IRS has some missing form or this or that (and it seems like they are always losing my stuff and hounding me for something or other), she takes care of it

That being said, she does specialize in real estate tax issues, so I think because of her background knowledge she is better suited to find deductions in the deals I do than say a non specialized CPA.