How to Evaluate a Potential CPA For Real Estate Investors


It’s time to talk taxes!

It’s time to talk taxes. Yes, I know that’s about as fun as a root canal, but it doesn’t need to be stressful when you have right professionals working hard to help you maintain the highest possible cash flow for your business. The following is my personal list of what to ask a CPA as you "interview" them for the job of serving you, your family, and your real estate.

Save this list for when you go to talk with a CPA. Now is the time to do this - before the rush of Tax Day in April. Print this list and write your answers here as you may interview preferably at least 3 different CPA’s and this will help you discern who is going to be the best fit for your business needs. It is worth the time to find a professional whom you know and can have a strong working relationship as you grow your business.

Ask the following:

  • How many real estate owners/ small business owners / business start-ups do they serve?  What type of businesses? Do they personally own rental properties?

  • Have they been familiar with your type of rental property (i.e. do they do single family homes, commercial with apartments above, duplexes - whatever type of rental you have ask them if they ever done the taxes before for this type).

  • If you have done any type of repairs, has the CPA asked you about the type of repairs? Some are subject to depreciation over the life of the asset whereas others may not be treated the same way. Ask lots of questions and give them lots of information on what types of expenses you’ve incurred.

  • On your schedule E that you bring into them, ask them questions like, “Am I getting all the tax benefits possible from owning this rental property?”

  • If you had to provide appliances or other items that are not attached to the structure, did the CPA list those items? What about computers/technology used solely for business? If you have to pay additional insurance, did they ask that amount?

  • What is viewpoint on the home office deduction?

  • Are they familiar with the guidelines of what constitutes a real estate professional?

  • What type of small businesses do they serve? LLC's S-Corps C-Corps?

  • Will they provide references? (they should, and then call their references!)  

  • Do they provide representation in the event of an audit? Ask how many audits in an average year that they represent. Let them tell you stories about recent audits.

  • What is the fee schedule for audit representation?

  • Is there any part of filing returns that they don't do? For example, Ohio has School District tax (in addition to property tax, yikes!) and it's a simple form but some CPA's don't want to bother with it.  

  • Will they review the last 3 years taxes to possibly amend?  

  • What is their philosophy on taxes? I.e. some CPA’s don’t want to deduct anything whereas others deduct possibly too much. Their personal viewpoint matters. This actually varies widely in interpretation of the law, especially with recent tax law changes. Be certain their philosophy aligns with yours.

  • What kind of work do they like to complete “pre-tax” season?

  • What will they do with the 1099 forms that may need to be completed? How much will that cost? Compare with with online options based on your level of tax expertise. Are they willing to complete them or are they willing to let you complete them? The cost difference and pros/cons are sometimes significant.

  • What are their digital security and identity theft procedures? How seriously do they take internet security and firewalls?

  • What other services do they provide? Bookkeeping?  Tax strategy/coaching?

  • What are the credentials of the staff? Are they all Enrolled Agents or CPA's or  tax prep secretaries?

  • What is the process that happens when a return is submitted? Who works on it? Who checks the numbers before it's filed? Who is liable for mistakes? Do they carry Errors and Omissions insurance on all their staff? If yes, what company? Listen to how they speak on this topic. Are they open and transparent about this?

  • What professional organizations are the members of and where do they complete their continuing education? Most of the time this will be readily posted in the office and they are happy to genuinely share all that they have accomplished professionally. You want someone committed to ongoing professional education.

  • What format do they require when taxes are submitted? Paper or digital? Do they keep digital copies of receipts or is that the client's responsibility?

  • Can you work with their personality and the friendliness of the staff? What is the office like? Organized? Peaceful? Or is it stuffy and filled chaos? Is the office clean or neglected and well-worn? You can discern a ton about services just from observing the physical environment.

I always recommend viewing this as a job interview of sorts with this CPA firm holding the very life of your family in their hands. I know and have seen the absolute devastating impact of not having the taxes done correctly.

Always double, triple check everything and ask questions until you’re completely comfortable and confident in their answers. Read for yourself and cross check the answers you receive for perspective as well as accuracy. A good CPA is totally worthy of paying for their services - this is not an area to cut in trying to save money. Look at your CPA as a member of your winning team that will make your real estate profitable and in compliance for the long term. Always make certain you are receiving the quality of service that you need and that you communicate your long term goals clearly.

If you have any questions regarding this general guide or pulling together your financials for what a CPA needs, please feel free to contact us at 740-255-3586.