Taxes - CPA Or Do It Yourself?
I'm curious as to how many of you are using ma and pa tax service, H&R Block, CPAs, or doing your own taxes. It just seems every time I turn around, I think of the old saying "If you want something done right, do it yourself." Dave T obviously has done his studying and due diligence on the subject. And I know he's said the cardinal rule is not to let the taxes be the reason for not buying a property (sorry if the quote isn't exact). But there are literally thousands of dollars that can be saved/made in tax money just by knowing how to structure your deals and expenses. Should I put more effort into interviewing 100 CPAs until I find one that will maximize the writeoffs or get Al Aiello's course and do it myself? Do you think the IRS puts more stock in and not be as quick to audit a return that has a CPA's name at the bottom of the page instead of my own?
Thanks
I'm a firm believer in letting a CPA do the taxes. He is the acknowledged expert, has passed a strigent state exam, and if he specializes in r. e. transactions I don't think you can go wrong. And, having taken a few accounting courses above the basics, I know how difficult taxes can be. Hire the professional CPA.
I am also a believer in using a r.e. attorney. He is also an expert and has passed the stringent exams for his profession, too.
These two professions will keep you out of lots of trouble, help you maximize your profits and not leave any money on the table, and ensure that the deal you are working on is legit.
Pay them well. They'll be your best friends if you let them.
BTW, I am not an attorney or a CPA. Just cautious.
Bob
This is one situation where doing it yourself could be big trouble. I can not tell you how many times I have seen clients really screw up their own tax returns and the fast food variety of tax prep firms can only handle the basics. If you invest in real estate, have a CPA do it - trust me.
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Bill Exeter
[ Edited by JohnLocke on Date 06/22/2004 ]
I agree that I don't want the liablity factor. I also don't want the time factor when I could be out finding more deals. A good re cpa should already have Al's course.......back to the phone book and due diligence. Thanks for the input
I do my own...of course I have an undergraduate degree in accounting and am very knowledgeable in tax matters.
Every couple of years, Money magazine runs an article on the accuracy of professional tax preparers vs the IRS.
It seems that they take an identical set of tax circumstances to twenty professional tax preparers and also asks the IRS to prepare the return.
Every year one or two tax professionals get it right, the rest don't do as well as the IRS free preparation assistance.
My point is that even if you rely on a paid professional tax preparer, you may not always get the best tax advice.
My point is that even if you rely on a paid professional tax preparer, you may not always get the best tax advice.
You're right, to a point. Someone can only give you their best advice when they have all your information, something that many people fail to do. Usually, they got to the tax man with, "here's my stuff, save me money, and let me know when it's ready."
If you want the best tax preparation, hire a good cpa with a real estate background, keep them up to speed on what you are doing thru out the year, and most importantly, learn some about taxes yourself so you can actually be productive in helping with your taxes.
Roger
Cannot say it better then rajwarrier said.
True, true, true.
To become familiar with taxes you can read 2 books:
Dianne Kennedy "Real Estate Loopholes" gives some basic ideas, should be read first;
Vernon Hoven " Real estate investor tax guide"
I do not do anything without talking to my CPA and my lawyer first. Yes there advice is expensive but worth every dime. For example, last year I had a deal where my tax liability was $35k my equal partner's tax liability was close to $100K. What was his mistake? To save money he does not consult with a CPA. He took title through his C-corp. A different type entity would have reduced his taxes tremendously. I cannot afford to make those kinds of mistakes, therefore I always seek professional advice.
I good CPA can save you a lot of trouble, time, and money! He spends his (or her) time studying taxes and tax laws so you can concentrated on deals and investing!
Good Luck!
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