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Taxes - how much to pay?

Started by TinoS • 13 replies • 2534 views

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TinoS (California)
Posts: 85
Posted:
We are in the SF Bay Area. 20 units. No special issues as far as I know. One unpaid delinquency since last June.

How much should we be paying for tax preparation? Our $500 a month property manager (just financial stuff) is sending this off for tax prep; like she has always done, I have no problem with that.

What are small HOAs paying for tax prep in California, specially the Bay Area, where everything costs too much?

Tino
TinoS (California)
Posts: 85
Posted:
And immediately after posting I realize the title is wrong. It should be "Tax Prep - how much to pay?"
TimB4 (Tennessee)
Posts: 21,062
Posted:
Tino,

We're a 130 unit TH development and do our own taxes (as well as self managed). It's not any harder than doing your own. If assistance is needed you can always buy tax software to help.

Tim
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
$75 in MA
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I paid about $300 one year to an accountant to do my taxes one year as an individual. It really depends on the level of expertise and complications involved. A certified public accountant will of course cost more than an H&R Block. It is like hiring a Doctor to remove a splinter versus having the nurse practioner do it.
The fees are tax deductible regardless.
Former HOA President
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I paid about $300 one year to an accountant to do my taxes one year as an individual. It really depends on the level of expertise and complications involved. A certified public accountant will of course cost more than an H&R Block. It is like hiring a Doctor to remove a splinter versus having the nurse practioner do it.
The fees are tax deductible regardless.
Former HOA President
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I paid about $300 one year to an accountant to do my taxes one year as an individual. It really depends on the level of expertise and complications involved. A certified public accountant will of course cost more than an H&R Block. It is like hiring a Doctor to remove a splinter versus having the nurse practioner do it.
The fees are tax deductible regardless.
Former HOA President
RogerB (Colorado)
Posts: 5,067
Posted:
Tino, if you use 1120-H for federal taxes it is very easy to do your own. And for your state tax you may have a Corporation tax form (similar to Colorado) which is easy to complete. Because these two forms are so simple and take only a few minutes to complete, we provide this as a free service to the HOAs we manage.
TinoS (California)
Posts: 85
Posted:
I am doing far more than the other two guys on the board, and anyone else in our 20 unit complex. I don't want to the taxes too. I am willing to pay someone. I just don't want to over pay for this pretty easy job.
DanielH1 (California)
Posts: 482
Posted:
I'm in California, too, and also in the Bay Area.

I think that we pay about $300 (or maybe $500).

For federal, I think that we file IRS Form 1120-H http://www.irs.gov/pub/irs-pdf/f1120h.pdf. A 1-page form: you might be ok with that.

But, of course, California is worse. We probably file FTB Form 109 http://www.ftb.ca.gov/forms/2010/10_109.pdf. A 5-page form. You probably don't want to do this yourself, at least not the first year.

Following years are a little easier. The forms don't change much so you can usually update the numbers (if you know where they came from in the first place).

Still, doing corporate taxes yourself is a big time-eater. Probably best to hire for a HOA rather than have it eat a bunch of time.
RichardB35 (Missouri)
Posts: 5
Posted:
Unless you're a tax professional, I would not advise self-preparing an HOA tax return. A return prepared by a CPA should cost no more than $500 and frequently its less. HOA's have a choice of returns they can file on an annual basis and each alternative should be calculated so an intelligent choice can be made. A knowledgeable CPA can also advise you on the proper procedures to follow to insure the minimization of your tax liability on an annual basis. You get a lot of insurance for a small fee.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
I believe our MC charges us $200 for his CPA to prepare our taxes.
TimB4 (Tennessee)
Posts: 21,062
Posted:
RichardB,

Welcome to the forum.

Although your advice is good, it's best not to reactivate old threads.
This is because what may have been good advice 5 years ago may be bad advice today.

Tim
SuzieE (California)
Posts: 20
Posted:
I believe we are paying about $350 this year. We have a 9 unit association & are located in the SF Bay Area. Hope that is helpful.

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