All Forum Posts by: Jay Ritchie

Thanks for the reply and you're right it's just my side. I read that article before posting and the guidance was helpful. I think my description made it sound much worse than it was but obviously it was taken the way it was taken. Unfortunately, to the extent we had a series of issues (the most significant being a widely inaccurate estimate) at each time it was my (the clients) fault. I should have done x (though I wasn't told that before). I should have known what the tax credit was (even though I said I didn't and didn't get a followup.) I should have seen my payment wasn't debited in a timely manner (notwithstanding that the time between the tax filing and letter from IRS didn't even cross a statement cycle.) 

I used the TT as a way to compare and contrast that my expectations are actually quite simple. And personally if someone had that critique about my area of expertise I would take it seriously and not get immediately defensive. Soup Nazi was funny on TV, not so much in real life.

So in short, if I can't trust my preparer to proactively help me keep simple mistakes from happening I'm not sure I should trust them on the more significant planning issues. To borrow your analogy, if you can't cook a chicken breast better than Walmart, maybe you shouldn't cater my wedding.

What I found most informative in the article (even though I felt it was written from a perspective of a preparer trying to level-set customer expectations) is that many preparers are overcommitted and probably not doing things to the level they or their customers would like. This particular preparer (no doubt to all the referrals here on BP) admitted they were growing and at the same time slammed due to all of the changes occurring in the tax code and government policies. I didn't mention previously (in my email to this preparer or in my original post) the missed appointments, consultations with preparers (as they scaled) that had no knowledge of our previous returns, needing to do repeated followups to get any response, etc. 

So I offer a counterpoint and addendum to the article referenced above from a customer point of view and questions we should be asking of potential preparers:

1. How big is the firm (sole person or a team)?
2. Who's doing my taxes and is it the same person that's assisting with planning? Who is the main point of contact?
3. How many customers do they have at present and how many do they expect they can serve with present staffing levels?
4. What is expected of me at tax time? What information do I need to be collecting all year to support the return? What format and how am I providing it?
5. What is the turn around time for questions? For returns?
6. Does preparation time change based on when you get info from me (i.e., if I give you everything in Jan are you still filing an extension and not finalizing my return until October?)
7. Do you take the information supplied and use it without question or should I expect you to question it, clarify it?

-Jay

Found this thread an am curious to get people's thoughts. We just recently (last 2 years) started using a CPA to do taxes as we needed guidance on the proper way to account for a flip and now rentals. I will add they came highly recommended on this board. Fast forward and we've had.. issues and when I laid these out I was fired from the firm. So here it goes...

As recommended above as we were approaching April 15 this year we asked for estimate and were told we didn't owe anything. Fast forward 5 months and we do our taxes and now owe $6K including penalties. We were told it was due to withholding but we hadn't changed anything nor switched jobs so not sure... (You would think that the withholding would have been accounted for in the estimates?)

In preparation for this year taxes we got a couple of questions, one of which was if we received any Child Tax Credit to which we replied we don't think so and lo and behold we had and because of the way taxes were filed we now owed a penalty for not accounting for them properly.

Something happened with our payment (everything was correct on form) so it didn't go through so we owed more additional interest.

I laid out the above to the preparer going so far as to say I was offering it with sincerity because it was, no doubt, an email full of frustration and critique. No blame, just, this happened and this is frustrating us. I went out to mention (this may have been the step too far) that Turbo Tax did better prompting for info than this preparer's processes did. Reality is that gathering all the info for the preparer, filling out their PDF forms and trying to do this as a couple with high paying jobs and investments was incredibly tedious and took many times longer doing it the CPA's way with me and my wife overwriting the shared PDF file several times, having to manually do math to combine numbers, etc. I'm no fan of Intuit, the company, and feel they perpetuate the horrible situation we find ourselves in because they make money off of it, but their software is GOOD and is thorough (for at least non-RE things), efficient (importing data, analysis v. prior years, etc) and explained a lot which was the point I was making to the preparer. 

As explained before, this landed with a thud and we were (unprofessionally I will add) told to take our business elsewhere.

This person clearly knows their stuff and 1:1 was informative when it was us asking questions. From a pure tax prep perspective it was lacking... no probing (which may have uncovered that child tax credit thing since we didn't know what it was and said as much) and no review of taxes from them before submission. Just a meeting before they were prepared and then we got the results. No, here's what changed, here's what we should do, etc. 

Per some of the posters above there should be a discussion about expectations but this wasn't so much about the stuff around the return (strategy, etc.) it was solidly just about the return and I don't think we were asking too much or in the wrong pointing out how painful it was.

AITA here? I don't like having to find a new preparer and want to avoid this in the future. I will definitely ask how they collect info and what type of pre and post preparation reviews to expect.

@Jarrett Harris @John Warren @Eudith Vacio thanks for the replies but this project is on the north side. @Paul De Luca I’ve looked into the program. Unfortunately I don’t qualify for the free option and finding a contractor that actually wants to jump through the hoops for the permit waiver is another hurdle. I heard the way it works is the plumber applies, has to pay the permit fee and then gets reimbursed months later. 🙄

Quote from @Jonathan Klemm:

Hey @Jay Ritchie - From our experience here in Chicago, we typically see new water/sewer lines range in cost from $16-24k depending on the depth of the trench, distance from the street to house, and just different contractors.

What area of the city are you in?

Hi Jonathan,

The project is on the north side, near Bryn Mawr and Kedzie. If you have referrals, I’d take them.

Jay
 

I searched but didn't find any specific referrals. Just posts that say get a lot of quotes because they can vary considerably.

Need to replace a supply line from the main to the house. Luckily the main is on my side of the street.

Thanks!

I too, need some referrals if anyone has some to share.

Quote from @John Yousef:

Aaron Frances Let me know if you need another contact. I've done it a few times and have a good contractor that I can refer...

 Hi John, about to embark on this and would love to have a referral as well.

Quote from @Issac San Miguel:

I am starting to see these HELOC options dry up for investment properties.

You may have better luck with a refi

Agreed, getting harder and harder to BRRRR, rates on investment properties, even conventionally financed are stomach-turning.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $570,000
Cash invested: $211,000

Full rehab of midcentury 3-flat in Chicago's Lincoln Square neighborhood. First major renovation since property was built in 1950s. Updated plumbing and electrical. New windows, kitchens and bathrooms. Expansion of garden unit. Refresh of common areas.

Used several new products on rehab: Wetwall shower panels to eliminate grout line deterioration. Thinscape kithcen countertops as lighter-weight premium countertop material.

What made you interested in investing in this type of deal?

Originally purchased as single family home conversion but pivoted to rentals during the building material spike of 2021.

How did you find this deal and how did you negotiate it?

MLS deal negotiated with traditional broker.

How did you finance this deal?

Conventional financing plus HELOC for rehab.

How did you add value to the deal?

Full renovation helps to compete and differentiate from many owner-occupied multi-units with deferred maintenance found in the area.

Lessons learned? Challenges?

Deciding to self-GC probably didn't save money and probably delayed the project overall.

It looks good to me. PM if you want the address to do a drive by. I have windows at ground level so easy to inspect.