Firms for reviewing Tax Returns before filing

Tax, SDIRAs & Cost Segregation
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Firms for reviewing Tax Returns before filing

Arijit De
Member since 2019 · 26 posts · 6 votes

I live in San Jose CA and have been working with my CPA for the last 8 years and he's been great in handling the W2, capital gains, etc. However, since last 3 years I've grown my real estate portfolio and have realized that perhaps he has limited knowledge in the real estate investing tax deductions, strategies, reduce ordinary income, depreciations, etc. It was like I was educating myself and then taking to my CPA proposing a strategy and then he would think and let me know "Yeah something like that exist but we only talk about these with our real-close clients". I don't know what it means but I have come to believe he may not be the right person as expert for real estate investor.

For the current 2020 year, I have shared details of claiming REPS status for my wife, reports of my cost segregation studies, 481a adjustment details for 2019 years adjustment to accounting method, etc. So we're in mid-late phase of the tax preparation where numbers are getting churned. However, I feel I could really benefit from reviewing the draft by a firm or expert CPA who specializes in real estate. My plan is that after engaging for review this year, maybe I will move to that firm for subsequent years for my tax filing and tax strategies.

I am not sure if any firm engages in this capacity - just review the final draft for 2020 to provide their inputs for changing anything. Do any of you have any experience similar to this? Really want to work with some folks or companies who has good experience in the real estate world.

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Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
5y

@Arijit De

Whenever you have doubts about your tax return, it's a great idea to get it reviewed by someone whose competence you can trust. In real estate, that would be the 20+ of accountants answering questions on this forum. All of us are real estate specialists.

None of us (I assume) will be able to review anything during this time of the year, so you would need to get your CPA to file an extension and then find somebody to review the draft later in the year. A thorough review most likely will not be free, a cursory one might be.

As to that silly "real close" phrase, whatever it means, here is one possible meaning. Possibly your CPA offers different levels of service. One is the basic tax preparation, and the other is full-service with consulting which should be significantly more valuable and therefore significantly more expensive. Just a maybe.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    5y
    Originally posted by @Arijit De:

    I live in San Jose CA and have been working with my CPA for the last 8 years and he's been great in handling the W2, capital gains, etc. However, since last 3 years I've grown my real estate portfolio and have realized that perhaps he has limited knowledge in the real estate investing tax deductions, strategies, reduce ordinary income, depreciations, etc. It was like I was educating myself and then taking to my CPA proposing a strategy and then he would think and let me know "Yeah something like that exist but we only talk about these with our real-close clients". I don't know what it means but I have come to believe he may not be the right person as expert for real estate investor.

    For the current 2020 year, I have shared details of claiming REPS status for my wife, reports of my cost segregation studies, 481a adjustment details for 2019 years adjustment to accounting method, etc. So we're in mid-late phase of the tax preparation where numbers are getting churned. However, I feel I could really benefit from reviewing the draft by a firm or expert CPA who specializes in real estate. My plan is that after engaging for review this year, maybe I will move to that firm for subsequent years for my tax filing and tax strategies.

    I am not sure if any firm engages in this capacity - just review the final draft for 2020 to provide their inputs for changing anything. Do any of you have any experience similar to this? Really want to work with some folks or companies who has good experience in the real estate world.

    Hi,  cost seg doesn't make sense on every property. But you are right, you need a specialized CPA. There is never a "real-close clients". 

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  • Christopher Smith
    Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
    5y

    real-close clients = all time spent is billable and collectible

    0Reply
  • Arijit De
    OP
    Member since 2019 · 26 posts · 6 votes
    5y
    Originally posted by @Christopher Smith:

    real-close clients = all time spent is billable and collectible

    Well its not that he isn't charging me or anything? I'm paying him (without negotiation) the charge he is invoicing me for. If 8 years is insufficient to get a tag of "close client" then perhaps I'm better off as a "far" client

    0Reply
  • Christopher Smith
    Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
    5y
    Originally posted by @Arijit De:
    Originally posted by @Christopher Smith:

    real-close clients = all time spent is billable and collectible

    Well its not that he isn't charging me or anything? I'm paying him (without negotiation) the charge he is invoicing me for. If 8 years is insufficient to get a tag of "close client" then perhaps I'm better off as a "far" client

    Absent something that would raise an obvious red flag, for example he had concerns over your integrity or honesty, I can't imagine him demurring if he really believes you have the capability to pay for services over and above basic compliance preparation costs. I would simply tell him you need and are willing to pay for more sophisticated services. If that doesn't qualify as real-close move on.

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  • Seidy Lasker
    Realtor · Phoenix, AZ · Member since 2020 · 79 posts · 37 votes
    5y

    @Arijit De

    Book a call with Ashish after tax season. Best in the business.

    0Reply
  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    5y

    @Arijit De

    Whenever you have doubts about your tax return, it's a great idea to get it reviewed by someone whose competence you can trust. In real estate, that would be the 20+ of accountants answering questions on this forum. All of us are real estate specialists.

    None of us (I assume) will be able to review anything during this time of the year, so you would need to get your CPA to file an extension and then find somebody to review the draft later in the year. A thorough review most likely will not be free, a cursory one might be.

    As to that silly "real close" phrase, whatever it means, here is one possible meaning. Possibly your CPA offers different levels of service. One is the basic tax preparation, and the other is full-service with consulting which should be significantly more valuable and therefore significantly more expensive. Just a maybe.

    2Reply
  • Arijit De
    OP
    Member since 2019 · 26 posts · 6 votes
    5y

    Thanks @Seidy

    @Michael Plaks Thanks for your response. I am exactly doing the same thing now - working with my current CPA to have the final draft prepared and then get a 2nd opinion review to correct/add/rectify anything in the returns before filing. But definitely for going forward, I’d plan to engage with a professional firm which not only provides tax strategy and guidance but also are well-versed with W2 real estate investors taxes.

    Oh and I did want to mention that I looked and Anderson Advisors and thought their expertise could help. However, their liaision model where you only discuss with account coordinator and not directly with the folks preparing taxes has not been suitable. So I canceled their service after learning this mode of operation. I guess there is still time before I can benefit with that kind of model.

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