Dear PoP – Advice for Choosing a Tax Accountant / Preparer

by Prince Of Petworth February 19, 2010 at 2:30 pm 19 Comments

Photo from PoPville flickr user binklesworth

“Dear PoP,

My partner and I purchased a house in Columbia Heights this past summer. In the past we have both prepared our taxes ourselves; however, this year we’ll be leaving it to a professional. We don’t mind paying a premium for a job well done, but we also don’t want to waste money on someone who just walks us through an online program.
I’m a bit hesitant to use a national chain, such as H&R Block, due to a number of anecdotal stories of bad experiences–although I’m sure there are just as many good experiences. It would nice to find someone local in the community to give our business.

Our situation is a bit unique, but nothing off the books: we were not married in 2009, so each will be filing as single; we purchased a house jointly in July 2009; one of us lives in the house, but the other lives abroad (Foreign Service, so his permanent residence is still technically DC); we rent a room in the house, so we have rental
income; we also have various unreimbursed business-related expenses and medical expenses that may be deductible; otherwise, there’s nothing that seems too complicated.

Our questions lie mostly with splitting up the rental income, home purchase closing-related points/costs, mortgage interest, and the homebuyers credit; and secondly how the rental effects our home purchase and maintenance-related credits/deductions. Income-wise, one or both of us may be borderline on tax brackets, so we also want to
calculate if/how additional 2009 IRA contributions could lower our taxes.”

I hope there are great non H & R Block recommendations. I’m looking for someone as well!

  • JW

    Money plans in Silver Spring. http://www.moneyplans.com

    Disclaimer: I interned there (not paid). I found the two partners to be incredibly knowledgeable and personable. They both have many years in the financial planning/tax preparation field.

    I am not sure how much their fees are for tax prep and I sure it depends on how complicated your return is.

  • Beancounter

    I would suggest looking earlier next time… I’m sure you will still be able to find someone, but most preparers want to meet with you in November, when they aren’t as busy. I would allocate the interest/taxes/points 50/50 (assuming that is the economics of your situation) and then from there allocate 10% or whatever reasonable square footage you rent to Sch E. As far as unreimbursed business expenses and medical… it’s quick math, both deductions have a floor, 2% for biz exp and 7.5% for medical (of AGI)… So if your AGI is 100k, you need 2k and 7.5k of expense before you start getting any benefit.

    If you don’t find someone you like, I would file an extension and look again post 4/15…

    POP – hope you’ve been making estimated tax payments, if not I would (as a rough estimate) make sure you’ve paid at least what you paid last year in taxes to each jurisdiction (assuming you income will be similar or more). If you haven’t, I would mail a check to each today, it will reduce the interest you will owe.

    captcha – vending-machine diarrhea

  • cbr

    I use Dembo Jones: http://www.djhpm.com/

    Been with them for years, they’re great. In general, though, these guys are expensive!

  • cbr

    By “these guys” I mean accountants in general — not just DJHPM.

  • K St.

    I know this isn’t what this person is looking for, but I have to say I used Turbo Tax myself instead of going to H&R Block this year and I think it was actually easier. Not to mention I saved something like $200.

  • Anonymous

    We have an even more, much more, confusing situation than you and have had great success with Stephen Kahn at http://www.kahncpa.com/

    We’ve used him for the past ten years, through multiple times overseas while renting our house in CH, other houses in other states, and a variety of other situations that a lesser accountant would likely have been annoyed by. And each year he’s gained us a refund or at least kept damages to a bare minimum.

  • DCster

    Has anyone used Charles Myrick, CPA? He is local (near McPherson Sq – 805 15th Street NW), but I didn’t see any reviews for him on yelp. I am looking for someone as well.

  • LL

    Does everyone reading this declare their rental incomes? Most people I know who are landlords do not…

    • Beancounter

      Do you know Charles Rangel too?

      When you say landlords… do you mean rent a room/in-law suite or whole property? If it’s the latter, I’d suggest they start thinking about the lack of revenue government is collecting and how easily bank records can be matched in the coming future… obviously there are thresholds for audit risk, but the game is a changing.

      Do the people you know complain about corporate tax loopholes and the rich people’s offshore tax shelters? If so, I’d suggest mentioning the word hypocrite next time they do so… If they are rich, then I’d suggest you tell them the Joe Biden doesn’t think they are very patriotic for their tax evasion.

  • Anonymous

    Have to agree with the person that said TurboTax. While I can understand why some people seek out CPAs (particularly those who have a company, or rental income from multiple sources, other complicated holdings, etc…), it doesn’t sound like the reader’s situation necessarily warrants it.

    While the scenario laid out is perhaps slightly more complicated than my situation was, it’s not that far off, and I used TurboTax with relative ease.

    All due respect to CPAs, but I just don’t think the vast majority of people need to use them, and I think anxiety merchants like H&R Block border on being predatory. Income taxes aren’t the most fun to do, but it’s absolutely within the ability of most people to figure out on their own.

    • gk

      i am a cpa, and i whole-heartedly agree! most people’s tax situations aren’t overly complicated and turbo tax makes it easy.

      also, beancounter has some good advice above.

  • I’ve used TurboTax for years and have had rental income, property sales, estate proceeds, capital gains/losses, etc. It is easy to use and once you get everything set up the first year, you fly through it in later years.

    You can input your taxes in Turbotax and see your results for free. You don’t have to pay until you file–why not give it a try?

    p.s. for those using accountants, I hope h/she is also giving your financial advice–otherwise I think you may be wasting money unless you have really complicated financial afaris.

    • 20011 ExPat

      I have nothing but loathing for TurboTax now that I know that their parent company, Intuit, actually lobbied AGAINST making taxes easier to file.

  • Matvey

    There’s no such thing worrying about a tax bracket. You pay x rate on your first A of income, then y rate on the next B. It’s not as though making it over one threshold suddenly makes all of your income taxable at the higher rate. Also, being abroad as an FSO and renting out the DC residence is pretty common, so I’m sure some of his colleagues at Embassy Kreplachistan have somebody that they use and is familiar with the arrangement.

  • park view

    Joseph Godbout in Silver Spring (right across the street from the Metro) is awesome. He took our complicated situation (rental property, partnered but unmarried) and smoothed it out in a really simple way. Highly recommend. (301) 588-4555

  • SeanInNW

    Turbo Tax is what my partner and I have use and have for the past eight years since we purchased our first house. We asked friends who were partners how they claimed their house when we first filed (since they weren’t married) — simple the partner who made the most money claimed the house. This is the approach we have taken each year.

    Using Turbo Tax we looked at each partner claiming 100% of the house and we looked at splitting. The best return comes from the partner who makes the most money claiming the house. My partner and I have joint bank accounts and treat everything as our money, so this may not work for you depending on your situation.

    A piece of advice from my mother’s boyfriend who does taxes. He recommends Turbo Tax and says unless you own a business or have really complicated finances why pay a pro?

  • Ocoee

    when people talk about expensive for a CPA what do they mean? What is an average price for a married homeowner in CH/Petworth going with a CPA?

  • Mal

    Agree with everyone about TurboTax. My income taxes are extremely simple (one W-2, some Savings Bonds taxable interest paid annually instead of lump sum when cashed, and that’s it), so I would never even dream of paying someone to do them.

    On the other hand, my dad has used TurboTax through multiple house purchases, stock/mutual fund sales, income bonuses, estate taxes (from my grandparents passing away), etc etc.

    Also, there is contact information so you can contact TurboTax via phone, e-mail, or live chat with any tax questions. Pretty awesome.

  • Tony


    This guys is awesome. A total character, but friendly and competent. Highly recommended.



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