Updated October 2026
To find a tax strategist, ask other real estate investors for referrals, verify each candidate’s credentials in the IRS directory, and interview two or three before hiring. A tax strategist is a tax professional, often a CPA, enrolled agent, or tax attorney, who plans ahead to legally reduce your future taxes instead of simply filing last year’s return. If you invest in real estate, look for someone who specializes in it and understands depreciation, cost segregation, K-1s, 1031 exchanges, and multi-state filing.
In this article, I’m not going to give you a detailed list of every way you can save on taxes. I am going to encourage you to find someone who has that list and can tell you precisely what you need to do.
This could be your most strategic move to preserve and create wealth, because taxes are likely your largest annual expense.
If you are a casual investor or don’t plan to build significant wealth, this article may not interest you. What I recommend takes effort, thought, and money, and it is only worth it with the appropriate economies of scale. And unless you are a CPA or tax strategist yourself, there’s no way you can do this effectively on your own.
Ed’s Story
In 2012, my business partner and I were developing a Hyatt House hotel. We wondered if there were ways to structure the ownership to maximize our legal protection and minimize our taxes.
I Google searched “how to find a tax strategist.” That’s how I found a guy named Ed.
Ed had blogged about his sad tax story. Ed is a successful multifamily real estate operator and real estate broker who made a lot of money for a lot of years.
Sadly, he lost a large percentage of it along the way.
How?
By overpaying the IRS.
Based on Ed’s income, his annual federal income tax bill of about $120,000 seemed reasonable to him. But one day, Ed read an article about tax-saving tactics for real estate investors. He met with his CPA for lunch to share them.
The CPA agreed they were great ideas that Ed should implement right away. He suggested Ed may want to go back and amend his returns for a few years to capture some of these benefits.
A bit irritated, Ed pressed his accountant further: “Why didn’t you tell me about this before?”
His CPA answered (to this effect): “You pay me to do your taxes and oversee your bookkeeping. You don’t pay me to be a tax consultant. I just take what you give me and file your returns.”
That was Ed’s last lunch with his now ex-CPA. He ditched him. But before he did, Ed interviewed several highly recommended tax-preparers. But Ed didn’t just hire a better CPA.
Ed hired a tax strategist.
In the decade since he hired a tax strategist, he has paid exactly zero dollars in federal income taxes, legally.
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands.”
Ed’s situation won’t apply to everyone, but even if you could save half that much, wouldn’t you want to know how?
To be clear, I believe Ed is a high-integrity guy. He is conservative by nature and believes in paying his fair share, as do I.
But to achieve these savings, you must understand the rules. Or know someone who does.
Tax Strategist vs. CPA: What Is the Difference?
A CPA is a state-licensed accountant. A tax strategist is not a license or credential. It describes a professional who focuses on proactive tax planning. Many of the best tax strategists are also CPAs, enrolled agents, or tax attorneys, but not all CPAs do tax strategy. Ed’s first CPA is a good example.
For most real estate investors, the best answer is both: a CPA or enrolled agent who also provides year-round tax strategy. That is what Ed found, and it’s what I recommend.
What to Look for in a Good Tax Strategist
Hopefully, your CPA is better than Ed’s. But I encourage you to be sure he or she is highly ethical and, simultaneously, eager to save you money on taxes.
A reader and researcher. Not just someone who got their license and fulfills their annual continuing education requirements, but someone who actively seeks out every legal tax advantage for you.
Someone who will defend you. You’ll want someone who is not afraid to use every legal deduction and who is ready and able to defend you if the IRS comes calling. I had a routine IRS audit in 2001 that turned into a long, drawn-out ordeal. I was glad to have a great CPA who represented me well. I never met with the IRS agent, and he only found one $180 item he disagreed with.
A system builder. This person will be an integral part of your team, someone who sets up systems to track your cash flows, expenses, and deductions all year. It’s frustrating to learn at filing time that you should have been tracking something all year.
A real estate specialist. If you invest in real estate, actively or passively, you’ll want someone who focuses on real estate clients. Make sure they have significant experience with K-1s, multi-state tax returns, self-directed IRAs, and self-directed 401(k)s.
The right availability. Decide whether you want someone available year-round or someone mainly focused on your return. Either may be fine, but you don’t want surprises. The best time to engage most busy tax professionals is not in the thick of tax season.
Certifications such as an enrolled agent credential or membership in the National Association of Enrolled Agents can be helpful. But to me, they matter less than real expertise and a specific focus on real estate.
How to Find a Tax Strategist
Ask for referrals. Start with other real estate investors, either in an online community or a local investment group. Ask who they use and what that person has actually saved them.
Verify credentials. Look up each candidate in the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to confirm they are a CPA, enrolled agent, or attorney.
Clarify the scope. Ask whether they provide year-round planning or only tax preparation. Many professionals do one well, but not both.
Compare fees. Tax strategy is often billed as a flat annual fee or hourly. Compare two or three candidates and weigh the fee against what they expect to save you.
Test their communication. Note how quickly they respond and how clearly they explain things. Even if they’re numbers-oriented, expect a high customer service standard.
Questions to Ask a Potential Tax Strategist
A great tax strategist/CPA can save you money, save you time, and help you focus on your real business or job.
As a key asset for your business, you need to treat them as such. Interview them like you would a new executive. Check their references. Read all the reviews you can find. Perform background checks.
Don’t be afraid to ask them hard questions. See below for a few examples.
If I started working with you and your firm, would I actually be working directly with you? If not, what is the background and experience of the person I would be working with?
What does your typical tax strategy consulting process look like?
Approximately how many of your clients have been audited by the IRS? What did you learn?
About what percentage of your clients heavily invest in real estate or are a business owner?
What are the typical tax strategies you recommend for someone with a W-2 job?
Tell me about a recent regulation change that impacts real estate taxes.
What’s your experience defending clients before the IRS?
What’s a big mistake you’ve made on someone’s tax return? How did you leave money on the table for yourself or a client and what did you do when you found out?
Would you consider your advice to be aggressive or conservative? Can you share some examples?
If I have real estate in multiple states, how do you determine which states I must file in and which ones I can avoid?
How much do you charge per state filing?
How do you educate your clients? And, conversely, how do you educate yourself?
Test them out. Note their response time to emails, texts, or calls. Even if they’re numbers-oriented and not particularly salesy, you should expect a high customer service standard.
Tax Strategies to Ask Your Tax Strategist About
I hired the same tax strategist that helped Ed. He has saved me a boatload of taxes as well. Here are some of the topics he teaches his clients. Every one depends on your situation, so discuss them with your own advisor:
Direct investment in real estate rather than REITs, which don’t pass depreciation losses through to investors on a K-1. (See what to expect from a K-1.)
Cost segregation and bonus depreciation. Many commercial real estate operators use cost segregation to accelerate depreciation on qualifying components of a property. The One Big Beautiful Bill Act, signed in July 2025, permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025, according to BDO.
1031 exchanges to defer capital gains taxes when selling one property and buying another. Note that 1031 exchanges generally apply to direct property ownership, not to interests in a real estate fund or partnership.
Stepped-up basis at death. Under current law, heirs generally receive a cost basis equal to the property’s value at death, which can eliminate the capital gains and depreciation recapture taxes that would have been due on a sale.
Self-directed IRAs and retirement plans, including Roth and SEP IRAs and qualified retirement plans. (See investing with a self-directed IRA.)
Classifying repairs versus capital improvements correctly to maximize current deductions.
Qualifying as a real estate professional under IRS rules, which may allow real estate losses to offset other income.
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Frequently Asked Questions
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A tax strategist is a tax professional who plans ahead to legally reduce your future taxes, rather than only preparing and filing your return. Many tax strategists are also CPAs, enrolled agents, or tax attorneys. “Tax strategist” is a description of services, not a license, so it is important to verify each candidate’s credentials.
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Not necessarily. A CPA is a state-licensed accountant who may focus on accounting, audits, or tax preparation. A tax strategist focuses on proactive tax planning and may or may not be a CPA. For real estate investors, the best fit is often a CPA or enrolled agent who also provides year-round tax strategy.
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It can be, especially if you own a business, have high income, or invest in real estate. A good tax strategist may identify savings that far exceed their fee. If your finances are simple, a qualified tax preparer may be enough.
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Passive investors in private real estate usually receive a K-1 that reports their share of income, depreciation, and other items, sometimes in multiple states. A tax professional who understands K-1s and real estate depreciation can help you report them correctly and plan around them.
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Generally, no. A 1031 exchange applies to direct ownership of real property, and interests in a partnership or fund generally do not qualify. Some investors use Delaware Statutory Trusts, which can qualify, but talk to your tax advisor before structuring any exchange.
Concluding Thoughts
I am aware that many of you know about all these strategies and more. And most good real estate-oriented CPAs are knowledgeable about them as well.
But I’m writing to stress the importance of implementing them consistently and correctly. And one way to do that is to partner with a strategic CPA who specializes in real estate and who hates to see you paying more taxes than you should. If you have any questions, please contact us or use this link to schedule a call with us.
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The information in this article is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where such an offer or solicitation would be unlawful. Wellings does not provide tax, legal, or accounting advice. Investors should consult their own advisors regarding any investment. Information and any opinions contained in this article have been obtained from sources that we consider reliable, but we do not represent that such information and opinions are accurate or complete and thus should not be relied upon as such.
