Turbo Tax with a rental property?

Question

Hello!

I closed on my first rental property in the last few days of 2021 - it's a duplex in Ohio, and I live in California. So I've been told my taxes will be a little more complex this year. I've filed with Turbo Tax in the past and had a good experience, even with some freelance work in addition to my W-2, but I understand the out of state property will add some hurdles to the process.

Would love to hear from other real estate investors experiences with Turbo Tax when owning a property. I'm leaning toward continuing to use Turbo Tax, against the council of some of my friends who have hired someone to prepare their taxes for them.

Daniel Hyman · Answer

@Ben Nitka

I’m biased, but I would agree with the other posters. The other thing to keep in mind is that if you continues to scale in real estate, you’ll inevitably want to bring a CPA on to your team at some point, so it would be beneficial to get that relationship started earlier.

Joe Martella · Answer

I highly recommend a CPA and not a tax preparer like the ones at the big box tax places.   Rental properties have different deductions than personal residences.  If you want to put TurboTax to the test, when you hire a tax professional, ask them to review the last 2 or 3 years of your taxes. If they identify additional deductions you were allowed, but didn't take, then you know your method wasn't effective.

Afam Agbodike · Answer

You can do it, but you will almost certainly be leaving money on the table. Turbo Tax is going to take the most conservative tax approach as they don't want anybody coming back to them saying they got the taxes wrong. A professional will most likely be able to more than pay for their fees in tax savings, plus save you time.

John Underwood · Answer

You need a tax professional.