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.

Try this - take everything you provided last year and try to do your own taxes. Once you're done, compare it to what the accountant completed. The key to this is to NOT look at the tax return that the accountant already prepared.

This reminds me of the common belief that ANYONE can paint and you shouldn't pay to have it done. There is often a BIG difference on how the paint job looks when you do it vs. a professional.

An accountant can provide you with valuable tax advice based on your situation and the tax laws. Have you talked to the accountant about the fee - perhaps they would lower it if you did a bit more work on the information you provide. This might be a better solution then doing it yourself.

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.

for the structure and number of properties, I would go w/ a pro.

THat doesn't mean you can't/don't shop CPAs balancing price and expertise.

it's best to stick to what your good at, and pay someone else to do the things you aren't so good at. The cost of your time is far more then that of which you have spent to allow this c.p.a. to do your taxes. if you file your taxes and you mess up, you pay for it. if your c.p.a. files your taxes and mess up he/she pays for it.

imo the reason it looks so easy for the cpa to do the taxes is cause they spent countless hours studying how to do them quickly. use this time that you aren't spending worrying about taxes with your kids or make more money. I have to hire people to do stuff so i can free up time to do what i want to do for me. plus they can vouche for you personally unlike a computer program can, if someone asks turbo tax why it was this or that, you'll be answering the questions costing you more time, could end up costing more then 600 dollars if you have to go back and hire a tax lawyer

I did my own taxes until 1979, when I was audited. I've used a pro ever since.....
Worth every penny and more. I can e-mail my guy at anytime during the year, give him an outline of what I'm thinking about doing, and he lets me know the ramifications.
Jim
Oh, I've had no more audits either.

I like having someone else's signature on my return. My preference is to use an enrolled agent or to select an accountant who is one.

I have developed a fair amount of software for running properties. There are two programs that reduce the the time for tax return preparation. One prepares a soft image spreadsheet that looks just like a Schedule E and the other combines soft versions of HUD-1 for use when I have a 1031 exchange involving multiple properties.

These have helped keep the preparation costs down, however, it still involved quite a bit of my time.

edmeyer, what tax program do you use ?

Thanks