What to Ask a CPA in Consultation

5 Replies

I’m in the process of putting my business together, though my husband and I have not yet purchased a property. I want to put a hard focus on laying the groundwork to create a business that is poised to scale. Once we start buying properties, I want to scale as quickly as we can, and I don’t want to backpedal to handle things on the business side that could have been ready ahead of time. 

That said, I have my first consultation with a CPA next week. What are some questions I should ask to make sure the CPA is a good fit from a real estate investing perspective?

Thanks, all!

@Kayla Johnson Do you guys own a primary residence or rent? Do you have expenses that can be written off on taxes? Do you have valuable assets? The answer to these questions really determines if you even need a CPA. 

I thought I needed a CPA when I first started out. That simple wasn't the case. Until you get big and start juggling expenses, tax issues, or owning properties in an LLC it's not necessary. It's nearly impossible to not backpedal.

Originally posted by @Jaron Walling :

@Kayla Johnson Do you guys own a primary residence or rent? Do you have expenses that can be written off on taxes? Do you have valuable assets? The answer to these questions really determines if you even need a CPA. 

I thought I needed a CPA when I first started out. That simple wasn't the case. Until you get big and start juggling expenses, tax issues, or owning properties in an LLC it's not necessary. It's nearly impossible to not backpedal.

We own our primary residence, have always taken the standard tax deduction, have 4 children, one graduating high school this year, have never owned a business, don't know what could possibly be written off or what needs to be saved throughout the process, and would prefer to have a cpa and attorney assist with the set up of an LLC to ensure we're getting the most tax benefits and asset liability protection as well.

I know we won’t be able to avoid all backpedaling, but I don’t want to have to restructure later, transferring properties and missing documentation necessary for tax benefits because I didn’t know to save it. 

We may just use the CPA to help set up the LLC and then return later when we have enough business to really need them. But either way, I need to ask valid questions in the consultation.

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Originally posted by @Daniel Hyman :

@Kayla Johnson

Here are some questions you could ask:

1) How can your firm provide value to me as a real estate investor?

2) Do you provide tax strategy consultations? Or simply tax preparation?

3) What is the fee structure?

4) What is the preferred method and frequency of communication?

 Thank you for the feedback, Daniel! 

I like when people ask how my day is going, if I can send them pictures of my bulldog they hear snoring in the background, and if I know of any good travel deals. 

But in all seriousness- 

I tell people to think about what your PERFECT relationship with a tax pro would be. 

Lay out what services/ things are most important to you. And assign them a value on 1-5. Realize that you likely can't get it all without paying more. 

Some people want to basically have a private accountant on call 24/7- which is possible. But not for the price of a $500 tax return. 

Good planning and strategy should save you at least what you spend on it. And someone who knows real estate should be able to provide you with referrals, personal experience, and overall feedback to your busieness as well. 

Ask about someone's history, how they got into real estate, their actual tax background. 

I just had a client get burned by a "Real estate specailized" bookkeeping firm because he was marketing himself as such- but reading his "about me" he had no formal tax/accounting background. Just a guy who was working an office job, decided he was tired of it and started doing bookkeeping.