How to choose an accountant

[Le Poisson]

Not really looking for a recommendation, but I am looking for teh right questions to ask in hiring an accountant.

Now that we are up to 4 rental units and three properties, things are messy, and we are getting our stuff together for taxes but don't want to get audited again. We think it's time to hire an accountant to put our "business" stuff into legitimate categories and file our taxes appropriately. Especially since last year's audit had the gov't claw back about $15,000 of our claims.

So the question is, how do you hire a good accountant, and is there a difference between one that is suited to a long term buy/hold strategy vs flipping? How about with investments? How about claims for a kid with disabilities? yeah... we have a few things going on here that don't match your standard filing.

So what do we ask, what do we look for?

[MusicLover]

There always used to be a difference between accountants and "bookkeepers".  You might want just a book keeper if you've been doing all the tax filing for yourself all these years.

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[LennStar]

In The millionaire next door the authors reported that their self-made millionaires typically got their accountants by word of mouth, asking around for a reliable accountant at business partners and preferably accountants that are their clients (and reliable as such), too. They never got the cheapest one because they were of the opinion that they got the quality that they paid for.

[trollwithamustache]

1. Ask about how they handle audits. You want to get a feel for how aggressive the accountant is and if that matches how aggressive you want to be.

2. I super agree with don't use the cheapest guy... My accountant now is low cost, but his office is a bit disorganized. you talk to one person and those notes get lost and its really annoying. If he charged say 5-10% more and had a good shared notes system that would totally be worth it.

3.) note there are bookkeepers, CPAs and Enrolled Agents. Either of the last two may be suitable for your needs.  You want a guy who other landlords use.

4.) whatever you are using for an accounting system now, be ope to changing to a system compatible with the accountant. You may be using some web-app thats cheap but if you find a great accountant who uses quickbooks, just switch over.

5.) ask about how comfortable they are with a range from full service (they do your book keeping) to you doing all the bookkeeping and they just do the taxes.   It sounds like you may want a lot of service this year, but going forward less service, a DIY inside the accountant system.

[ToTheMoon]

Sounds to me like you need someone to set up a Chart of Accounts that works specifically for your rentals. Then you do your own bookkeeping, only using the categories within your chart of accounts, and take the works to an accountant to file your taxes. Do you have a corporation set up, or are you running the rentals as sole proprietors? You can Google the tax forms for either of these entities to see what everything eventually needs to narrow down to.

With separate bank accounts for business only expenses, and a good chart of accounts set up for the rentals you will be a much more attractive client in the long run. :)

None of that helps with actually selecting someone, but it might help with your organization!

TTM