ASK THE RIGHT QUESTIONS: A GUIDE TO HIRING A REAL ESTATE TAX CPA

The most important person in your financial life — outside of your spouse if you’re married — is your tax advisor. Taxes represent one of the largest expenses you’ll face in your lifetime. And, if you understand the tax law, they are also one of the most straightforward expenses to reduce.

The right tax advisor will work with you to design our real estate business in a way that helps you reach your financial goals while legally (and permanently) reducing or eliminating your taxes. Choose the wrong advisor, and you’ll find yourself paying more taxes and missing out on some great wealth-building opportunities by investing in ways the government incentivizes. What exactly does the right advisor look like? As you evaluate your options, here is a guide with seven questions to consider when hiring a real estate tax CPA.

1. What are their credentials?

It’s easy to call yourself a tax advisor. You want to avoid someone who claims to be a tax advisor simply because they are authorized to prepare federal tax returns. Instead, look for a Certified Public Accountant specializing in tax.

2. What system do they use for tax reduction?

The best advisors don’t just rely on their knowledge and experience; they follow a proven system for permanent tax reduction. A top-notch CPA should be able to show you evidence that they’ve used this system for many clients with real estate investments. Working with someone who consistently replicates results is a far better predictor of your future success than partnering with an advisor who operates without a system.

3. Who is in their network?

A top-notch real estate tax CPA is not an island. They are connected to a strong network of specialists, including real estate attorneys, mortgage brokers, cost segregation specialists, insurance brokers and more. As your financial plans evolve and become more complex, having access to this vast pool of expertise can prove invaluable.

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4. How often will we meet?

To be a true advisor, your CPA should meet with you throughout the year, not just at tax time. You’re looking for someone who will proactively reach out to offer new ideas, get regular updates on your business and check in on your long-term goals. As a rule of thumb, something is wrong if you visit your dentist more often than you speak with your tax advisor.

5. How will they handle an IRS audit?

If you do become audited, you deserve an experienced tax advisor who will go to bat for you and your business. Ask prospective CPAs to share examples of how they’ve handled client audits. If a CPA suggests skipping legitimate tax deductions to avoid an audit, look for a different CPA. You want a CPA who isn’t afraid of the IRS, who will handle all communication with the agency and who is comfortable with the process.

6. What do they think about real estate?

Any good tax advisor loves real estate. It’s one of the best investments you can make to create wealth while permanently reducing taxes. As you listen to the response to this question, also look for signs that the CPA has an entrepreneurial mindset. A CPA who thinks like an entrepreneur can be a game-changer. They will be more innovative when it comes to helping you accomplish your financial goals.

7. Can I check their background?

Before hiring a real estate tax CPA, it’s crucial to conduct a thorough background check. This process should involve checking their credentials, verifying their license, reviewing client testimonials, and even checking for any disciplinary actions or complaints.

THE BOTTOM LINE

Finding the right real estate tax CPA involves more than choosing someone with an impressive resume. It’s about finding a strategic partner who can help you navigate the complex world of real estate taxes, leverage opportunities and ultimately build wealth. By asking these seven questions, you’ll be well on your way to finding a CPA who can take your real estate investment game to the next level.

Provided by Rent Magazine, written by Tom Wheelwright, CPA  CEO WeathAbility

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