WS1912 Should You Hire an Accountant? | Kelsey Head

In our final segment with Kelsey Head, a seasoned CPA with nearly two decades of tax experience, we continue our enlightening discussions on the Real Estate Syndication Show. As the co-founder of Head Tiler LLP, Kelsey shares invaluable insights into tax planning for real estate investors.

One key aspect that Kelsey emphasizes is the value of bundling services. Her firm offers a comprehensive package that includes tax returns and year-round planning, ensuring that clients feel comfortable reaching out with any questions without worrying about excessive charges.

We also explore when it's appropriate for investors to seek professional tax help. While individuals with straightforward tax situations can handle their taxes online, Kelsey advises consulting a professional when dealing with investments, K-1s, passive losses, or real estate transactions.

For those investing out of state, Kelsey stresses the importance of filing taxes in the states where properties are located. This enables the utilization of losses against future gains, which may not be possible if state returns are neglected.

When choosing a CPA, Kelsey's advice is simple but crucial: find someone you trust and feel comfortable with. Approachability and a willingness to provide advice without excessive charges for every phone call are essential qualities to consider.

We hope this episode provides our listeners with valuable insights to confidently navigate tax planning and select the right CPA. Remember to like, subscribe, and share the Real Estate Syndication Show with friends who can benefit from these expert perspectives.

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Transcript

Kelsey Head: I don't like sending quarter hour bills and constantly nickel and diming people because they will not call you when they sell or have a question. So we try to practice everything as a tax return, plus any planning that needs to happen throughout the year, all as one kind of bundle so that you know what it is, you know what's going to happen, and you don't have to worry about picking up the phone and calling me because you think you're going to get a hundred and some dollar bill.

Whitney Sewell: This is your daily real estate syndication show. I'm your host, Whitney Sewell. Today, our guest is Kelsey Head. She's a partner at Head Tiler LLP, which she founded in 2020 during COVID after leaving a large firm. But this is her 19th year in tax. I think she said to be approximately 18, 19 years of experience in tax as a CPA. She is going to dive into a series here with us. I hope you'll listen to each segment because we're going to dive into different questions that I get asked as an operator from our limited partners often. And so you're going to hear a number of things that I know you've had questions about. Kelsey, welcome. I'm honored to get this time with you to interview you and really go through some tax questions, right? Things that, questions I know I get asked all the time, and often I have to say, hey, I am not the one to be asking that question of, right? And so I have to look for obviously people like yourself, right? That are team members of ours, that we partner with, trusted experts like you that have those skill sets, and in your case, it's tax, which we seem to most of us need help in that world of tax. So happy to get to chat with you today. Welcome. Thank you. Appreciate you having me. And Kelsey, you know, as as, you know, many of our investors, even as they grow in their investing, right, it was different when maybe they just had a salary, you know, income or W2, and then they make their first passive investment and they make a few more. Oftentimes, you know, I get questions like, well, Whitney, when did you hire a personal accountant, right? Or somebody to do your taxes versus you're doing your own thing or, uh, and I just want you to be able to answer that question for them. Cause I'm sure you get the same question often.

Kelsey Head: I do, and I think every situation is a little bit different. If you have a W-2 and a 1099 and a couple of kids or deductions, then going online and doing your own taxes, that's exactly what I would do. When you start to invest and you're going to get K-1s, if any of the things surrounding passive losses or real estate or what happens when you sell, if any of those things are new and confusing, that's probably a sign to talk to someone and get some help. The other thing that I've noticed over the years is the investors that email investor relations a lot. They have a lot of questions or about how these things come up or how they've come on to their K-1. If you're catching yourself doing that a lot, that probably means you need to go get someone. The reason I say that is not because we ever mind answering questions, but we always have this little bit of caution that we're not giving tax advice out without knowing an entire situation because there's always an if or an or or an and that you may not know about so we have to be a little bit careful too. But I will tell you that if people come to me, LPs, you know just anyone in general, if they come to me have me look at a tax return And I look and I say, hey, there's just one K-1 and you may have two questions a year. I'm more than happy to answer those two questions rather than charge them a bunch for a tax return that they could otherwise just get online and do themselves. And so I would say, reach out to someone, get some help, but at the same time, don't pay a whole bunch of money if it's just not quite that time yet.

Whitney Sewell: Yeah, it's a I know for myself, it was a growing process, right? You know, as my taxes became much more complicated, you know, even early, you know, in real estate investing, it was just obvious I needed some help. I just needed more questions. Like you said, I you know, more and more questions as as I'm doing more things outside of a salary position. And I didn't know the answers. And it was pretty quick. I'm like, Okay, I need I need somebody else to do this for me.

Kelsey Head: Right. And I think the other one that triggers it immediately is, you know, if you're a Texas resident, but you invest in a Colorado property, or, you know, the other way around, anytime you're outside your own state and comfort zone, that gets a little bit tricky. Generally, it's going to be time to check in with a professional and make sure that you're going about it the right way or you don't miss something and get a bunch of notices or deduct something you shouldn't and land with an audit because that's ultimately going to cost you three times what it was to just pay someone in the first place.

Whitney Sewell: Yeah, you know, and I get that question as well, often around, should I be filing taxes in other states, since I'm investing in properties in those other states? What, how would you respond?

Kelsey Head: And the answer is generally always. And the reason is, you know, again, I'm a Texas resident, but I have invested in a property in Colorado. If I don't file in those the first year when there's a loss, Then when I sell that property and I now owe tax in the state of Colorado, Colorado doesn't know anything about those losses that happened two years ago. So when we talk about, you know, getting to take losses against, potentially against gain in a later year, that falls out for those state returns if you never filed. So even though it may cost you a little more, you know, if you have a $20,000 Colorado loss, that's now going to save you, you know, two $3,000 of tax, and you paid $500 for a tax return? Well, it was worth it.

Whitney Sewell: I often get that question. And I and Kelsey, tell me if I'm wrong here, but I usually tell our investors, you need to talk to your your CPA. Correct answer. Your tax expert, right? I may not believe that myself, but that may not apply to you as well. Right, right, right. Kelsey, anything else around hiring an accountant that you would leave the listener with or the investor with that they need to be thinking through?

Kelsey Head: The only thing I would say is hire somebody you trust, hire someone you like. Sounds small, but hire someone that you are not afraid to pick up the phone. I'm seeing more and more. It's what we do. I don't like sending quarter hour bills and constantly nickel and diming people because they will not call you when they sell or have a question. So we try to practice everything as a tax return, plus any planning that needs to happen throughout the year, all as one kind of bundle so that you know what it is, you know what's going to happen, and you don't have to worry about picking up the phone and calling me because you think you're going to get a hundred and some dollar bill for a 10-minute conversation. I don't think that's the way to do it, and I think that's a good question anytime you're choosing someone that you'd like to be your advisor.

Whitney Sewell: Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.