Accountant Or Do Your Own Taxes
Hi,
My wife and I currently have 4 investment properties and our primary residence. The investment properties are split between 2 LLCs.
We have been going to an accountant to do our taxes and typically I gather ALL the data in quick books for the year and print out the reports. All he does in 2-3 hours is plug them into the progam and print them then submit a bill. The bill is typically around $500-600. To me it seems like a lot when I am providing very clear and organized numbers. I even go so far as to copy the sheets that he is going to need to enter data and put the numbers in on the paper copy.
Am I being cheap or stupid. I have started thinking of doing my own taxes with the help of some program.
Any advise?
Bobe
If you are going as far as you are with inputing the data...why pay someone else to copy your work? I have done rental property taxes using turbotax (web version) before and it is easy. It took me longer than a few hours (but I had a folder of papers not a nice spreadsheet). Assuming that you make less than $150 an hour, My opinion, save your money.
Funny you say that about painting. I am a big believer of having a good attorney, a good realtor and a good accountant but always try to do what I can when money is tight.
I like your approach! I think I am going to have a conversation with him regarding the fee and what work I can do before hand to lessen it.
Thank You.
How many tax returns are you having prepared? You have two LLCs. Is there a partnership return or a corporate return for each LLC?
I assume that you are getting a 1040, but what about a state tax return? Is that also being prepared for you.
If you are getting three federal returns and a state tax return for $600, I think you are getting a bargain.
edmeyer, what tax program do you use ?
Thanks
Assuming that the properties and personally owned by your husband and yourself (whether solely owned or jointly owned), and not owned by a legal business entity.
Rental income and expenses are reported on Schedule E. If filing status is MFJ, then you can put all properties on a single Schedule E.
My answer may change if you tell us that any or all of your rental property is held in a business name.[ Edited by NewKidInTown3 on Date 04/15/2008 ]
I replied to you other question. Using an LLC is the way to go (in my opinion) ou get they same flow through tax benifits but you limit you & Hubbys liability. Also there are no extra Taxes like with a corp. for example: if some1 sues because of injury at one property they can go after you & your Hubbys asset and all three properties. With the LLC you & your personal assets are protected only the LLC assets are at risk. I dont know your home state but you can also use a series LLC this seperates each property from the other all under the same LLC, but they can only be formed in Deleware & Nevada that i know of. but you can have an LLC from Deleware & live and own property in another state. Therfore this is still an option for you. Nevertheless get an LLC or at least google LLC vs Sole proprietor to understand more. some times an Accountant is unfamiliar with these issues, though they know all about Finance.
My own accountant didnt know he could own his car under his Company name & write off the price as a business expense. Who would figure that. He thought my vehicles were all vans til he found out vehicle number two was my benz of which he has the same one.
Happy Investing!
Quote:
On 2008-04-16 03:26, Cali_Clara wrote:
1. When / Why would we put the properties in a business name? (Would we make a partnership/LLC, or other?)If you are self-managing the properties then there is probably no real lawsuit protection to be gained from a business entity.
A business entity has value for estate planning, probate avoidance, and business continuity.
Quote:2. What are the advantages? (Tax advantages?)As a general rule, an LLC is tax neutral. Because it is a "flow-through" entity, your income tax liability will not change just because you have an LLC.
Consult your tax advisor, your estate planner, and an attorney with expertise in entity structuring for specific details. You need to involve all these people in your discussions to arrive at the correct business entity for you.