Are you a real estate investor? One way to run a successful venture is to have a professional team to help you. A real estate CPA is one of the most trusted professionals you can have in your business circle.
A Certified Public Accountant (CPA) can help you organize complex financial transactions, maximize profits, and adhere to tax regulations. As a result, you’ll make sound financial decisions that prevent costly mistakes in the long run. Discover how a real estate CPA can help your business.
Save on Your Taxes
Different states have varying regulations regarding income and property taxes. So, if you have multiple properties in different states, filing your taxes may be complicated. CPAs understand the tax laws; hence, they can help you secure the best rates for your business.
First, they’ll ensure a timely filing of your tax returns so you avoid penalties for late payments. In addition, they know the little incentives, such as tax benefits, that eventually help you save on tax payments.
Develop a Formal Business Structure
Real estate investment involves buying, marketing, and selling various properties. Despite its complexity, many real estate investors choose a business structure without considering the tax implications. The truth is that a business structure determines the relevant tax payments, and that’s why you need a CPA.
A real estate CPA can help you decide on the right structure for your business. For instance, instead of running a sole proprietorship, a CPA can help you form a corporation to add legitimacy to your business.
Recognize Essential Financial Trends
Real estate investment is subject to frequent changes in market trends. For instance, the US Tax Code undergoes constant modifications leading to significant tax liabilities for real estate investors. Similarly, market trends often lead to varying profit margins for real estate ventures.
Since predicting market trends requires in-depth financial knowledge, a professional CPA can help you. They can monitor such changes using financial expertise to ensure your business’s success. Moreover, they can pinpoint changes in tax codes to cushion you against overpayment or breaching the tax code.
Structure Your Business Debts
Debt is inevitable in most business ventures, and real estate is no exception. Sometimes, you may borrow extra cash to offset a mortgage or outstanding expenses. An effective way to manage your debts is projecting upcoming loan rates so you don’t incur high debt payments.
Real estate accountants can help you structure your debts to a befitting long-term plan. They can use their refinancing skills to develop a unique solution that saves time and money in the long run.
Prepare Accurate Business Reports
As an investor, you should have an updated portfolio of your properties and investments. Likewise, you should have a detailed report of the financial aspects of each investment so you track your returns and goals. A business report also helps you identify loopholes in your strategies so you plan for the future.
Luckily, you can compile the report courtesy of a certified public accountant. Stay up to date on your investments by frequently reviewing the business reports.
Financial Advice Before Decision Making
CPAs are invaluable sources of financial advice when making critical decisions. They leverage their skills to spot the downsides you may overlook during decision-making.
For instance, if you anticipate an increase in the tax charged on capital gains, you may wonder whether to dispose of existing properties or retain them for future price increments.
A professional CPA will come in handy in such instances to help you make objective investment decisions.
Final Thoughts: Do You Need a CPA?
CPAs are essential pillars of every real estate investment. They can help you save on taxes, advise before decision-making, recognize financial trends, and prepare business reports. Most importantly, CPAs can help you develop the relevant business structure for your real estate venture
Gurian CPA Firm specializes in accounting and tax services in Texas. Contact us if you need help in tax planning and real estate business advisory.
