Recommended Tax filing services in Raleigh North Carolina?

Question

Hi All,

I'm sure this question has been answered 1,000 times on BP, but can anyone give me advice on what I should do in regard to filing my 2015 taxes.  Previously I had used Turbotax and done them myself, but this year I purchased and renovated a duplex which I am "house-hacking."

I just want to make sure I file all my taxes correctly and get all the money back that I can.  Would going to an H&R Block be sufficient?  Should I hire a CPA? A certified Tax Preparer?

I know my situation (owning rental property is very common but I want to make sure I do everything right.

Adam Schneider · Answer

Keith,

Turbo tax won't help you with tax strategy. Are you just looking for tax data entry, or do you want a strategy to help you minimize taxes and make effective business decisions?

As an aside, I've been reading Brandon Hall posts for a few years now, and he is outstanding in providing insight and recommendations.

Adam

Brandon Hall · Answer

@Keith Nelson the answer to your question lies with answering two more questions: (1) how much do you know about taxation in relation to rental real estate; and (2) how much time are you willing to put into researching the tax code to ensure your return is compliant with the regs?

Unfortunately, TurboTax fails many real estate investors because the real estate investors simply don't know how to answer the questions in order to generate the following correct questions. The software is run based on algorithms, so answering one question incorrectly can lead you down an entirely wrong path.

That said, TurboTax can be great for small landlords who are willing to put the time in to learn about the tax code and ensure that the manner in which they are answering the questions will produce compliant returns. Many landlords are not willing to do this, as the tax code is complicated, hence the market for CPAs.

I recommend you connect with a real estate savvy CPA and ask them what the best approach is. Avoid being upsold into expensive tax prep that you may not necessarily need.

Assuming no other variables are at play (minus a W2 job), if you were to call me up, I'd probably give you high level information related to the rehab and how taxation works when you owner occupy a rental. I'd then likely have you prep your own returns and then review them at my hourly rate to ensure compliance prior to you e-filing through TurboTax. That method will allow you to have a CPA's eyes on it without necessarily forking out $400-600.

Of course, a CPA preparing your returns may save you the additional cost of tax prep anyway as we are acutely aware of expense line items missing from your returns.

To conclude - figure out how much time you are willing to put into your returns. If not a lot, seek out a CPA.

*Just noticed you asked about HR Block. I highly encourage you to avoid them. I've corrected many HR Block returns this year. Real estate is not their strong point.

Matt Rothwell · Answer

@Keith Nelson, I've done something similar to you, I bought a duplex and spend a bunch of money on renovating it.  I used TurboTax this year and last year, I had do go with the Premier edition, it was something like $54.99.  It was pretty simple, and all of the depreciation calcs were built in.  Google is your friend too, if there's some sort of terminology that you don't understand.

I think the only way I'd go to an accountant is if I owned multiple LLCs.  For anything less, I think TurboTax works fine, just go slow and don't rush your way through it.

Adam Schneider · Answer

Hey Keith! You are preaching to the choir! I hear you loud and clear. It's really tough to keep up with changes in tax laws and interpretations of tax laws. When it comes to tax strategies, I lean on the experts. There are certain parts of the business where I pay a premium for premium expertise, and other parts of the business where I take a different route. Most of the time with taxes, it's not that someone enters something incorrectly--it's that the person doesn't know what he/she doesn't know. So, the person misses out on opportunities. The same item might be able to be classified in different ways. And, there are timing rules. As an example, if you carry a property for over a year and can demonstrate intent to have kept it as a Buy and Hold (Brandon Turner can correct me if I'm wrong), you can take that as Capital Gains instead of Ordinary Income. Turbo Tax won't explain all of that to you.

Keith N. · Answer

@Adam Schneider Pardon me as my knowledge of filing taxes is very minimal.  My main goals are to minimize taxes, report my rental income in such a way that my future purchasing power is increased as quickly as possible, and plan for the future as I plan on purchasing more rental properties (not super soon but within the next year or two).

Recommended Tax filing services in Raleigh North Carolina?

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