Hyattsville, MD · Member since 2017 · 42 posts · 57 votes
So I'm just starting out however I want to get my business structured the right way to meet my goals and I'd like to get input from a professional on the best way to structure my entities (and what entities to use for that matter). I'd like this to be the same individual I use going forward for my personal and business taxes as I start to make money for my business. I'm the type of person who gets a 'tax guy' and stay with them for life. The only reason I'm moving away from my current tax person who've I've used all my life is that he doesn't specialize in real estate and I'm looking for someone who does. So of the choices, which would you think I needed and also is there anyone in MD or DC you can recommend?
Both a CPA and an EA can help with the financial ramifications of entity structures. You should decide if you want someone local that you can go see or someone who works remotely and go from there. There are several CPAs/EAs on here that work with clients remotely, so poke around a bit and maybe interview several. If local is your preference, attend a local REI meeting and ask for referrals. Best of luck in your search.
Also check out the www.NAEA.org page in your search. It should help you find someone local. If someone comes to me, I'll send them your way.
If you need help in your search or want to verify something don't hesitate to ask.
For example: I have clients worldwide and things are just as easy as I e-mail them, talking on the phone. I even use Skype and TeamViewer to communicate with clients so I'd highly recommend looking for one of the best with great references that interviews well with you.
So look for someone you can connect with that works out for your situation.
As far as CPA vs. attorney, I generally find that attorneys are more specialized in creating specific structures and interpreting tax law. They are going to be more expensive and you still have to file your taxes afterwards.
Hi Michael, we're going now to our 3rd professional CPA due to moving 2 times and wanting someone local, and finally feel we've found a CPA who not only "Specializes in tax preparation" (I didn't know that some DON'T and focus more on bookkeeping/accounting.) AND he is also really knowledgeable/experienced with REI taxation and returns. Not only that, when we said we really are looking for someone to be our go-to CFO he knew what we meant and when I asked for it he also recommended a great Portfolio Manager and Tax/Estate Planning Lawyer to figure out how all this *REI stuff* fits into a Will/Kids should anything unexpected happen! (He also welcomed/encouraged us to run purchases by him: even to simply independently analyze whether we should pay down points, or use that cash toward the down payment, or save the cash and just pay more each month on the mortgage, etc -- things the BiggerPockets calculators can't do and loan officers give you the vibe they're too busy for.)
**That said when I asked about IRA REI strategies, he's conservative and has not done them for clients as of yet. He's open to it, but warned that it almost guarantees an audit and requires added 'precision' on our part -- which could mean IRS headaches if we ACCIDENTALLY/UNKNOWINGLY did something out of bounds or didn't document something correctly, etc.
My conclusion is if you're doing 'simple' SFHs, and/or you're not an LLC, or anything 'special' a CPA who specializes in Taxes and REI work would do the job, an EA who's good with REI would likely be better; but, if you want to do anything unique/creative, or outside the box or also wish to then have the business succession planning or have kids and want to have the business continue should anything happen to you...and all that added planning, maybe a tax lawyer would be best, or a Tax Layer who works closely with the CPA/EA...make sense? My understanding is that the added benefit of having a Tax Attorney is that you also have attorney/client privilege.
@Steven Hamilton II was where I first heard about EAs, and was great to talk to and answer my questions.
The value-add position of the Enrolled Agent is court representation w/o need of getting a tax attorney. Both have proper accounting skills. The REI experiences is a specialization either my have.