Should I file my own taxes?

Question

I've had the same person do my taxes for the last few years, but he seems to have disappeared this year. I guess I shouldn't have waited this long to reach out to him, but in prior years I'd set an appointment with him for that same week and would be in and out within one hour. I file jointly with my wife (both have W-2's) and I have one rental property that is under my name. Do you think I should try to find a last-minute tax pro or file my own taxes this year?

Jeff Nash · Answer

If you do not want to rush and ensure there nothing is inadvertently omitted or inaccurate, you can file an extension. If you believe you have paid in enough to date through W-2 withholding and the expectation is that you will not owe considerably more that might be an option. I do not know your tax situation, but I know most tax professionals are fairly busy and normally do not guarantee they will be able to file by the original timeline. I'm only on here to take a quick break!

Account Closed · Answer

Do you feel competent to do your own return? If so, go ahead & file on your own.

If you aren't comfortable filing your own, then file an extension and look for a new accountant after the deadline.

Mike Wells · Answer

Alecia, I also have 6 properties, no trusts, basic stocks, etc. I previously paid $700-$900 to my previous CPA. My new CPA charged me $2,900 this year! I feel like it's double what it should be, but feel that I should just find someone new rather than have someone justify their pricing to me. Is that consistent with what you paid?

Jack Gray · Answer

So I've been doing my own taxes in Turbotax for 20 years now (I only own 2 rental properties but both were BRRRs), and I finally got stuck on something and went to a CPA 2 years ago, and he reviewed my past 5 years of returns and pointed out that I had made multiple mistakes (incorrectly categorizing repairs vs capex, calculating basis and therefore depreciation wrong, failing to realize that certain expenses for a home converted to a rental property start being deductible the day the property was placed in service vs actually occupied, the list goes on). We ended up refiling several of those returns and saving thousands.

On the one hand, doing my taxes myself helped me to understand the rules and processes better...on the other hand, you don't know what you don't know, and sometimes those mistakes can cost you a lot of money (in my case, more than hiring a CPA). It's also worth mentioning that it's better to consult the CPA BEFORE you make a major decision (buying, selling, converting to rental, etc), since that's when you still have the opportunity to strategize and structure the transaction in the most tax-advantageous way.

Matt Barth · Answer

Finding a pro this late in the game is going to be difficult. You can file an extension or with mostly w2 income and a single rental property just use a software to help you prepare and submit your taxes. I assume the property is just a single family home rental? If so, that is pretty straight forward.

Gisael Gomez · Answer

Hi David,

It is pretty easy to do your taxes yourself with one of the popular software like TurboTax or H&R. All these software will guide you on your declaration asking you basic questions to determine what you need to do and what not. If your income come mainly from W2s and one rented property you should not have any problem with doing it yourself. I always use TurboTax and it works beautifully for me, but should you feel uncomfortable doing it yourself obviously file an extension and look for someone to support you.

Probably worth mentioning, TurboTax can facility real-time assisting from tax professionals if needed, obviously this will be at extra cost.

Hope this helps!

Mike Wells · Answer

I see people keep referring to tax strategy and buying/selling properties. I understand that how you structure your business could benefit from tax strategy, but how many ways can you buy or sell a property to avoid capitol gains, etc, unless you're doing a 1031 exchange?

Jason Malabute · Answer

The key takeaway here is to reach out to your tax professional early in the year and provide them with all the necessary tax information to ensure timely and accurate filing.

To answer your question, unless you have the proper knowledge or training to handle your taxes, especially since you have a rental property, it would be advisable to seek out another tax professional instead of filing your taxes yourself. Filing incorrectly can lead to more significant issues, and if you get audited or need to amend your taxes, it could end up costing you more.

Tanner Bellamy · Answer

I would try to look for a pro. This website is a good place to start. Most firms are starting to ramp up again this time of year so it may be hard, but I know that there are people out there that still need business. I would reach out to tax pros here in the forum that are sharing value.

Account Closed · Answer

Life is better when you understand your taxes. A lot of CPAs, tax preparers, etc don't really understand property investing. If you are going to be a serious investor, use Turbo Tax (choose the version that fits your needs) and play with it making various changes to see how things affect your taxs. Pepare your taxes and data and take them to a tax peparer so that it is easy for them to see how you run your life so they can make the best decisions for you.

Be aware that if you have a 401(k) or IRA, your fees are hidden and you are paying a lot more than you think for those fees. And you can actually use those funds to invest in properties or do lending, if done properly.

Should I file my own taxes?

Should I file my own taxes?

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