Accountants Help Save You Time & Money

Accountants will provide your real estate investing business with a number of valuable services.

A great one will be a valuable financial partner who's just as committed to your businesses success as you are.

You may find that one person or company performs all the services, or that you need to hire several different people to meet your needs.

That part isn't as important as making sure that whoever is performing these duties knows exactly what they're doing, provides you with updates on a regular basis to tax law changes, and has experience dealing with investors such as yourself. Even better, they could be an investor themselves.

The Services you may need are:

•Tax Strategist – TA’s or CPA’s specialize in analyzing all aspects of your finances, both personal and business, in order to provide you with a recommendation and implementation plan moving forward so that you are making the most intelligent choices possible for your situation.

•Tax Monitor – this professional meets with you on a quarterly basis to make sure your tax plan is staying on track and to help you project what your tax liability will be for the current year. Any new opportunities, ideas or concerns can be addressed then.

•Tax Return Preparation – An annual event, this is the final step of your tax planning for the year and the starting point for the next.

•Bookkeeping – Usually more economical than a CPA, a bookkeeper can make sure your books stay accurate and up-to-date, as well as help you prepare a profit & loss statement each month. They also can perform duties such as Accounts Payable & Receivable and bank and credit card statement reconciliation.

Before I make any purchase for my real estate business, I make sure to call my accountant and get his or her professional opinion as to the financial worthiness of the deal, any pitfalls I may not be expecting, or any negotiating tactics that I may have overlooked that will help protect my position.

For instance, if you are planning to buy a house to flip, then your accountant may point out that the proceeds are not eligible for a 1031 exchange due to the short holding time, and therefore you will be paying capital gains tax on the profit in that tax year. Depending on your current tax strategy, that may or may not be a wise decision for you at this time, therefore, you can decide before you make an offer whether you want to spend the time and energy negotiating a deal.

This is only one example of how a great tax person can be a critical extension of your business, and should really be considered a valuable Team Member.