Best HOA Tax Prep Services

Tax season is always a source of headache for homeowners associations. Boards rarely have the expertise for tax preparation, which is why the best HOA tax prep services are often necessary.

 

Why Tax Preparation Matters to an HOA

Homeowners associations are, in most states, recognized as non-profit corporations. Because of this status, many HOAs operate under the false belief that they are not required to pay taxes or file tax returns. This is a common misconception.

Unless specifically exempt by law, homeowners associations do need to pay taxes and file tax returns. Tax returns are also usually required even if the association did not generate any taxable income. Homeowners associations are prone to misunderstanding the law due to their non-profit status. This misunderstanding, though, can lead to a world of financial ramifications.

What problems can a homeowners association face if it fails to pay taxes or file tax returns?

  • A failure to pay penalty will be levied against the homeowners association. This is calculated based on the tax amount owed, which equates to 0.05% for each month the liability remains unpaid. The sum accumulates until the association pays its debt in full.
  • A failure to file penalty will also be levied against the association. The calculation of this penalty depends on the length of time from when the return was due, which is 5% for every month it is late.

 

How Professional Tax Prep Services Can Help

Doing an association’s taxes is not as straightforward a process as it may seem. A tax professional can help your HOA board file its tax returns the right way. Still unconvinced? Here are the reasons why professional tax assistance is necessary:

  • Tax professionals know what forms to file (Form 1120 or 1120-H, among others) and how to fill them out depending on your homeowners association.
  • Tax professionals know how to compute your total tax liability based on what income is taxable and what income is tax-exempt.
  • If your HOA needs it, a tax professional can file an extension of time.
  • Tax professionals are familiar with homeowners association tax filing requirements on both the federal and state levels.
  • If your HOA has missed filing its returns or made errors in filing, a tax professional knows just what to do.

 

Top 5 Best HOA Tax Prep Services

Outsourcing a service requires careful consideration during the selection process. A lot of companies and firms offer tax services, but which ones will actually meet your needs? Here are the best tax prep services for homeowners associations:

 

1. BJM & Co

Bach, James, Mansour & Company is a Georgia-based firm that offers individual and business tax preparation services. The firm also has ample experience in assisting HOAs and condos with tax filing on a federal and state level. If your Georgia homeowners association needs help to file tax returns (even back returns), BJM & Co is a good place to start.

 

2. Clark Simson Miller

Clark Simson Miller offers tax filing assistance to community associations, including HOAs, POAs, and PUDs. The company also provides its tax services to other HOA management companies. With a dedicated team of Certified Public Accountants, CSM is a good choice for associations. Plus, they offer remote services that help reduce costs.

 

3. FirstService Residential

FirstService Residential teams up with your third-party accountant to ensure all your tax requirements are met. The management company prepares all necessary documents in addition to assisting with annual audits. Beyond that, FS Residential also provides other accounting services in conjunction with tax preparation.

 

4. Maine Condo Companies

Maine Condo Companies caters specifically to condo associations as well as homeowners associations. They offer assistance with both federal and state tax return filing. For federal returns, Maine Condo Companies makes sure your association reaps the full benefits of Form 1120-H and takes care of any additional forms such as the 1099-NEC form.

 

5. Sundin & Fish, PLC (HOAtax.com)

Sundin & Fish, PLC is a CPA firm that provides tax services to homeowners associations. By partnering with HOAtax.com, you can expect a completed tax return form along with all related schedules and financial statement analysis. The firm also allows you to compare between Form 1120 and 1120-H before choosing the method of your liking. Their services are available nationwide.

 

Get the Best HOA Tax Prep Services Today

Tax preparation is often a difficult process, especially if your board does not know where to begin. Make tax season a breeze for your homeowners association by outsourcing the job to a certified professional.


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