How to find a good CPA (Texas)

[FiredUp321]

I’ve been doing my taxes on my own through turbotax, but want to make sure I’m doing everything right and not leaving anything on the table. This year I’d like to hire someone, but don’t know how to go about finding someone good that’ll be worth the cost. I recently purchased another rental property(possible flip) but I’d like to discuss the tax implications of that as well.

[SeattleCPA]

I’ve been doing my taxes on my own through turbotax, but want to make sure I’m doing everything right and not leaving anything on the table. This year I’d like to hire someone, but don’t know how to go about finding someone good that’ll be worth the cost. I recently purchased another rental property(possible flip) but I’d like to discuss the tax implications of that as well.

There are lots of people (often solo practitioners who are not CPAs) who will take your money and give you a good price. Some significant percentage of those folks, IMHO, don't actually know what they're doing.

It honestly often makes sense to not complicate your finances and try to DIY returns yourself. (ChatGPT will give you lots of often adequate answers for your questions for basically $20 a month.)

BTW, we've got lots of real estate tax posts at our blog. You might want to click one of the links in my email signature to get there and then poke around. But our firm and firms like ours are probably too expensive for most individual real estate investors. (We've had to basically move to way more complicated higher-tax-liability work since that supports prices that let us pay for the talent and the tech one needs to do a good job.)

[FiredUp321]

Thanks for the response. I think you’re right about the solo practitioners who aren’t CPAs. I’ve been going through turbotax live and it’s worked out for me, because if i have any questions a CPA is there to answer any questions.

[GilesMM]

Most CPAs don't do a lot more than plug your numbers into a tool and calculate a tax and generate a return.  They either not good at giving advice or reluctant to take on the responsibility.  To find a good one you need to ask around - friends, neighbors, etc.

[SeattleCPA]

Most CPAs don't do a lot more than plug your numbers into a tool and calculate a tax and generate a return.  They either not good at giving advice or reluctant to take on the responsibility.  To find a good one you need to ask around - friends, neighbors, etc.

I think you also need to be willing to pay a lot more than a place like H&R Block or Intuit charges. Those tax returns that cost $300, $500, $700? Absolutely that's a lot of money. But those prices maybe support someone making $15 to $25 an hour seasonally.

I feel like I say this all the time, but most people need to keep their finances simple enough to DIY. If you have questions, subscribe to ChatGPT and ask it your questions. (For $20 a month, you'll probably get adequate answers most of the time.)

[mistymoney]

I went to a cpa for my taxes for a couple of years. It was really annoying! He kept taking personal responsibility for every dollar in the refund " I got you this.....I got you that...." I had done my taxes on my own so this was just a function of plugging in the numbers like I had done on turbo tax many times. It felt really icky and he really wasn't digging into things to find anything else, so I went back to turbo tax.

My return got more complicated with my side business, and I wasn't sure about some stuff. There had been a tax person who moved into the building I worked at down town, so I contacted him and got set up. I've been with him about 5 years now and technically - he is great. The only hiccup is that he is a downtown person and has a lot of swanky clients so I am small potatoes and I accept that. Now he has saved me a lot of money, for real! but he doesn't take personal responsibility for every penny! Or any penny, really. Very straightforward. Cost is about 400/year and I think well worth it.


So my advice is don't go for a neighborhood/bargain person. Check out the online reviews. And understand that most of what they do will be just plugging in numbers like you would at turbotax. You still have to compile all your information and all your numbers.

The things I don't want to do is figure out how much I can put in my SEPIRA and how all the home office deduction stuff works, in kind donations and itemized deductions, and the dividends off taxable.

[mistymoney]

oh - and the new guy is an enrolled agent. I don't know about the former one.

[SeattleCPA]

I went to a cpa for my taxes for a couple of years. It was really annoying! He kept taking personal responsibility for every dollar in the refund " I got you this.....I got you that...." I had done my taxes on my own so this was just a function of plugging in the numbers like I had done on turbo tax many times. It felt really icky and he really wasn't digging into things to find anything else, so I went back to turbo tax.

My return got more complicated with my side business, and I wasn't sure about some stuff. There had been a tax person who moved into the building I worked at down town, so I contacted him and got set up. I've been with him about 5 years now and technically - he is great. The only hiccup is that he is a downtown person and has a lot of swanky clients so I am small potatoes and I accept that. Now he has saved me a lot of money, for real! but he doesn't take personal responsibility for every penny! Or any penny, really. Very straightforward. Cost is about 400/year and I think well worth it.


So my advice is don't go for a neighborhood/bargain person. Check out the online reviews. And understand that most of what they do will be just plugging in numbers like you would at turbotax. You still have to compile all your information and all your numbers.

The things I don't want to do is figure out how much I can put in my SEPIRA and how all the home office deduction stuff works, in kind donations and itemized deductions, and the dividends off taxable.

In my area, that's less than H&R Block charges. And HRB is using seasonal, modestly skilled preparers in many cases at that price.

BTW I know it's a lot of money? The $400 I mean? But it's not close to enough in most markets to pay enough to attract talented people. And that's the problem with the tax return preparation fees.

[Chris Pascale]

My dad was a CPA, so I never would have thought to do taxes any other way.

My returns have been complicated in the past (multiple states some years, a business, stock trades, a rental home) and I personally just don't like doing taxes.

I think I pay $525. He tried not to charge me anything after my dad died, so I mailed him a check and told him to let me know if I was short.

[reeshau]

So my advice is don't go for a neighborhood/bargain person. Check out the online reviews. And understand that most of what they do will be just plugging in numbers like you would at turbotax. You still have to compile all your information and all your numbers.

Long ago, I was told about lawyers: "they aren't paid for what they do; they're paid for what they know."  I think the same thing applies to CPA's, and registered agents.  They make it look easy because it is for them.  And for many here, who have taken on a personal study of all things financial and tax, it also looks easy.  But to the average person who is too busy, not interested in numbers, or intimidated by dealing with the IRS, it's very worth it.

So, the trick is to find a person you trust, that can "level up" your game.  If you need leveling up.  I went to a preparer the first time I sold a house, the first time I moved states, and the first couple of years I was an ex-pat.  I paid attention and learned, and am comfortable with all of those.

I do have in mind that DW doesn't have any interest in taxes.  So, at some point I will probably re-engage with a preparer and stick with them, not to handle something too complicated or particularly save me time, but as part of estate planning for my spouse.

[mistymoney]

I went to a cpa for my taxes for a couple of years. It was really annoying! He kept taking personal responsibility for every dollar in the refund " I got you this.....I got you that...." I had done my taxes on my own so this was just a function of plugging in the numbers like I had done on turbo tax many times. It felt really icky and he really wasn't digging into things to find anything else, so I went back to turbo tax.

My return got more complicated with my side business, and I wasn't sure about some stuff. There had been a tax person who moved into the building I worked at down town, so I contacted him and got set up. I've been with him about 5 years now and technically - he is great. The only hiccup is that he is a downtown person and has a lot of swanky clients so I am small potatoes and I accept that. Now he has saved me a lot of money, for real! but he doesn't take personal responsibility for every penny! Or any penny, really. Very straightforward. Cost is about 400/year and I think well worth it.


So my advice is don't go for a neighborhood/bargain person. Check out the online reviews. And understand that most of what they do will be just plugging in numbers like you would at turbotax. You still have to compile all your information and all your numbers.

The things I don't want to do is figure out how much I can put in my SEPIRA and how all the home office deduction stuff works, in kind donations and itemized deductions, and the dividends off taxable.

In my area, that's less than H&R Block charges. And HRB is using seasonal, modestly skilled preparers in many cases at that price.

BTW I know it's a lot of money? The $400 I mean? But it's not close to enough in most markets to pay enough to attract talented people. And that's the problem with the tax return preparation fees.

I don't think it's a lot of money, maybe twice what tt charges, plus a bit more. But I do think of it as a tiny splurge.

And I think it is expensed to side biz income, or some of it is.

He's a one person shop, so just his time and overhead.  He is streamlined and I fill in detailed forms. sqftage of office space vs sqft of home, for home office deduction etc. So just txing numbers into his software. there isn't showing up with a folder of papers like hr block. all statements and reports dumped into a file share. I wouldn't think a lot of time. And I did a one hour consult before we got started that was $200. So I'm assuming he's pricing his time at 200/hr or better for the tax filing. that was afew years ago, so not sure if his rate for consult has gone up or not.

[SeattleCPA]

He's a one person shop, so just his time and overhead.  He is streamlined and I fill in detailed forms. sqftage of office space vs sqft of home, for home office deduction etc. So just txing numbers into his software. there isn't showing up with a folder of papers like hr block. all statements and reports dumped into a file share. I wouldn't think a lot of time. And I did a one hour consult before we got started that was $200. So I'm assuming he's pricing his time at 200/hr or better for the tax filing. that was afew years ago, so not sure if his rate for consult has gone up or not.

@mistymoney , ChatGPT suggests his annual sole proprietorship profits based on that pricing equal about $84,000. That sounds about right... and equates to making maybe $65,000 to $75,000 in a W-2 job? That's about the entry-level accountant salary in many areas roughly.

BTW I have a couple of friends who priced like that and worked about 150% of full time. They made about $130,000 in sole proprietorship profits at their peak years. Which maybe equates to $110K in W-2 wages? (Again this for working many 60 hour weeks during year.) But both crashed and burned in their 60s due to RSI and arthritis type disabilities.