Author Topic: CPA tax accountant estimate - reasonable?  (Read 549 times)

YoungStache

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CPA tax accountant estimate - reasonable?
« on: February 15, 2019, 01:35:29 PM »
Hello,

I live in San Francisco and was given an estimate over the phone for $550 for 2018 tax-year return preparation. I am wondering if this is reasonable.

I moved from Washington state to California during the year, and have a W2 from Washington state and a W2 from California.

I have capital gains/trades (less than 10).

I have an out-of-state rental property in Pennsylvania state (he said a PA tax return would be warranted as well).

Also, he said rental losses could not be deducted from taxable income as my income was too high, and could only be carried over as credit for next year. What do you guys think?

MoseyingAlong

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Re: CPA tax accountant estimate - reasonable?
« Reply #1 on: February 15, 2019, 01:46:54 PM »
Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

SeattleCPA

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Re: CPA tax accountant estimate - reasonable?
« Reply #2 on: February 15, 2019, 01:48:45 PM »
Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

+1

For what it's worth, I think our shop would charge probably 50% more... Just sharing that to provide context...

Tip: Sell the out of state properties to unlock the suspended losses and simplify future returns... then look at doing your return with TurboTax...

WanttoFIRE

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Re: CPA tax accountant estimate - reasonable?
« Reply #3 on: February 17, 2019, 04:03:53 PM »
You're getting a good deal, I'd probably charge almost double.

YoungStache

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Re: CPA tax accountant estimate - reasonable?
« Reply #4 on: February 17, 2019, 06:33:10 PM »
What's the benefit of going to a CPA when I could just use Turbo Tax?



Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

+1

For what it's worth, I think our shop would charge probably 50% more... Just sharing that to provide context...

Tip: Sell the out of state properties to unlock the suspended losses and simplify future returns... then look at doing your return with TurboTax...

WanttoFIRE

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Re: CPA tax accountant estimate - reasonable?
« Reply #5 on: February 17, 2019, 09:20:31 PM »
What's the benefit of going to a CPA when I could just use Turbo Tax?



Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

+1

For what it's worth, I think our shop would charge probably 50% more... Just sharing that to provide context...

Tip: Sell the out of state properties to unlock the suspended losses and simplify future returns... then look at doing your return with TurboTax...


I've prepared 100s of returns and have yet to find a perfect turbo tax return unless the client has a w-2 and not much else..maybe it's self serving but it's also the truth! If you like tax and have a simple situation turbo tax is perfectly fine. Multi state and a rental is probably right past the "simple situation" threshold.

SeattleCPA

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Re: CPA tax accountant estimate - reasonable?
« Reply #6 on: February 18, 2019, 11:56:29 AM »
What's the benefit of going to a CPA when I could just use Turbo Tax?



Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

+1

For what it's worth, I think our shop would charge probably 50% more... Just sharing that to provide context...

Tip: Sell the out of state properties to unlock the suspended losses and simplify future returns... then look at doing your return with TurboTax...

IMO, most folks should use TurboTax because most folks either have or should have simple tax return.

However, if you have a multistate or international footprint, own an interest in a pass-through entity like a partnership or S corporation, or invest in rentals, it's very unlikely you're doing your return correctly or optimally. And it's possible someone "saving" a thousand or a few thousand dollars a year on CPA fees loses tens or hundreds of thousands of dollars in tax savings.

The truth though? In most situations, having a slightly incorrect tax return or a tax return where you haven't minimized your tax liability isn't that big a deal. You don't  benefit, e.g., by spending $1K to save $500 or remove some small error you're unlike to be audited on.


CareCPA

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Re: CPA tax accountant estimate - reasonable?
« Reply #7 on: February 18, 2019, 01:13:38 PM »
What's the benefit of going to a CPA when I could just use Turbo Tax?



Very reasonable for a not simple situation involving 3 states (even if one doesn't need a tax return) and a move.

+1

For what it's worth, I think our shop would charge probably 50% more... Just sharing that to provide context...

Tip: Sell the out of state properties to unlock the suspended losses and simplify future returns... then look at doing your return with TurboTax...

IMO, most folks should use TurboTax because most folks either have or should have simple tax return.

However, if you have a multistate or international footprint, own an interest in a pass-through entity like a partnership or S corporation, or invest in rentals, it's very unlikely you're doing your return correctly or optimally. And it's possible someone "saving" a thousand or a few thousand dollars a year on CPA fees loses tens or hundreds of thousands of dollars in tax savings.

The truth though? In most situations, having a slightly incorrect tax return or a tax return where you haven't minimized your tax liability isn't that big a deal. You don't  benefit, e.g., by spending $1K to save $500 or remove some small error you're unlike to be audited on.
I come across this pretty often with individuals.
There is a small inaccuracy from a previous year, and they want me to correct it. But I'm not going to charge them $400 so they can get back $200. I just tell them it's not worth paying me for.

YoungStache

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Re: CPA tax accountant estimate - reasonable?
« Reply #8 on: February 18, 2019, 03:33:25 PM »
Thanks for the responses.

I donít mind paying for a CPA to do the job correctly and also to save me some time / teach me a few things if itís a reasonable rate. Seems like tax laws change every year.

Does having a CPAís stamp of approval/ prepare your return in and of itself reduce IRS audit risk?


Side question:

If I own a rental property in my own name, is that considered a sole proprietorship?

And does anyone know if you have to pay/file twice for an out-of-state rental (property in PA, but live in CA?