Whether you’re a real estate broker or a small property business, you’ll need to hire an accountant to complete your taxes each year. This is standard practice for any business owner or freelancer.
Even if your tax return comes back with zero money owed, it’s still essential to ensure your bookkeeping is done correctly.
The questions below will help you find the right real estate tax accountant for your business.
Many accountants are familiar with rental property income, but not all are knowledgeable about passive income from real estate investments like syndications or REITs. Accountants specializing in accounting for landlords, property managers, and other real estate professionals are best qualified to help you with all aspects of your business finances.
If your accountant doesn’t have experience with real estate investments, in that case, it’s a good idea to get a second opinion from another expert before putting your money at risk and proceeding with any type of tax planning or tax preparation!
A certified public accountant (CPA) or licensed attorney can advise you on taxes and accounting issues specific to your state and industry.
Real Estate Accountants should possess a range of credentials that reflect their knowledge and ability to manage the financial aspects of a real estate business successfully and accurately. In particular, the accountant should possess a Bachelor’s degree in accounting, finance, or a related field.
They should have a Certified Public Accountant (CPA) certification, demonstrating their commitment to the profession and ability to handle the financial issues related to a real estate business.
They should have experience in the real estate field. They should have a thorough knowledge of relevant tax laws, regulations, and other legal matters.
They should have an excellent working relationship with tax attorneys they trust.
So, when looking for a real estate tax accountant, ask to see a copy of their license (or licenses) and their professional memberships, including state boards and associations. Doing so will help you ensure they’re up to date on current regulations and trends.
Good accountants remain up to date on the latest tax regulations and guidelines for real estate taxes by engaging in a variety of activities.
They should regularly consult trusted sources of information, such as tax law publications, websites, and professional organizations, to ensure they are aware of any changes that have been recently enacted.
Additionally, accountants should attend workshops, seminars, and webinars hosted by these entities can help accountants stay informed of any new tax regulations and guidelines for real estate taxes.
They should also take continuing professional education (CPE) courses in taxation, allowing accountants to ensure they are current with the ever-evolving tax regulations and guidelines.
Finally, networking with fellow accountants and tax professionals can help keep accountants abreast of what’s coming down the pipeline so they can advise clients accordingly.
A skilled accountant would likely respond by providing a comprehensive breakdown. They will give the number of real estate investors they currently serve.
Additionally, they would also explain the estimated property value of those investors, providing a comprehensive overview of the estimated value of their investor’s real estate holdings. Furthermore, they may even break down their clients’ diverse real estate investments, such as commercial, residential, or industrial holdings.
The decision of whether to provide the actual names of real estate investors to third parties must be made on a case-by-case basis, as there is no one-size-fits-all answer. Accountants should be aware of the applicable laws and apply those accordingly.
The information about the overall portfolio, the number of investors, types of real estate holdings, and portfolio diversification can help you decide if the CPA is a good fit for your needs.
Accounting software is changing rapidly. Some of it is web-based, so it’s easy to access data from any computer with an internet connection. Other software requires downloading files or using unique interfaces to get your information.
Ask about this ahead of time, so you know what kind of access you’ll have when it comes time to start using the software. An accountant should be willing to discuss how they handle virtual bookkeeping and keep track of all your assets, liabilities, and income streams.
When considering real estate accounting services, it is essential to evaluate the accountant’s qualifications and the quality of service they have provided to their past clients. One way of doing this is to look at their online reviews.
You can also ask for referrals from the accountant’s current or past clients to get a better sense of their service level. This can provide valuable insight into the accountant’s level of expertise, communication style, and ability to problem-solve.
Asking a real estate accountant for referrals from past clients can indicate the quality of service they are likely to give you and should therefore be considered when evaluating an accountant.
Taxes are a part of life, and it’s essential to ensure you take advantage of all the credits and tax deductions you’re eligible for. Our qualified real estate tax accountants at Accolade Accounting can help you with all your accounting and tax preparation needs. To learn more, call 470-646-2663.
Until next time my friends,
Cheers!
JD Longino, CPA
