Tax return cost: CPA vs Turbo Tax

Dallas, Texas
Tax, SDIRAs & Cost Segregation
2yFollow

Tax return cost: CPA vs Turbo Tax

Jason Sung
Investor · Dallas, TX · Member since 2019 · 91 posts · 30 votes

Hi, 

I have a W2 job (my wife stays home and I have two kids) and owns a few SFH as rental. I did tax return last year (including buying two SFH houses, selling one house) through a CPA and he charged me ~$1000. Is this amount normal?

It seems TurboTax® Premier is for RE investors to file tax by themselves. Is this a good option, instead of relying on a CPA? 

0Reply
85 views

Most Popular Reply

John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y

How much money might you lose by not using a CPA over doing it yourself with TurboTax?

Answer: more than the cost of TurboTax.

3Reply
See this reply in the discussion

14 Replies

Jump to latestLatest
  • Nate MeekerBusiness Member
    Real Estate CPA | California · Member since 2020 · 543 posts · 251 votes
    2y

    @Jason Sung - that is a fair price. Sure, TurboTax could be less, but the opportunity cost of missed deductions is exponential. 

    I could replace the toilet on my rentals, but to be honest after trying and wasting time, I rather just pay a handyman now and focus on making more money in my accounting business to reinvest in real estate. 

    Same thought could apply to DIY tax preparers :D 

    The CPA Realtor 569 Reviews
    WebsiteView Page
    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2y

    How much money might you lose by not using a CPA over doing it yourself with TurboTax?

    Answer: more than the cost of TurboTax.

    3Reply
  • Sean O'KeefePro Member
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 870 votes
    2y

    Cheapest plastic surgeon vs. most expensive? 

    The difference is quality isn't always immediately obvious, but in the long run, you will see the difference and regret going with the cheaper option to save a couple of thousand $.

    [email protected]628-241-0888
    1Reply
  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    2y

    @Jason Sung

    I think this post might be helpful:  https://www.biggerpockets.com/forums/51/topics/1088325-expla...

    1Reply
  • Account Closed
    Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes
    2y

    You get what you pay for! Why would taxes be any different :P 

    1Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    2y

    Without knowing more details, I would say that price is likely in line.

    If your wife stays at home, you may want to look to see if she can qualify for real estate professional status if she manages the properties.

    The requires for real estate professional status are
    1) 750 hours on real estate related activities
    2) More time spent on real estate than a W-2 job / business.

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
    View Page
    1Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    2y

    @Jason Sung

    I have 25 SFR that I self manage and do taxes my with turbo tax. It's definitely not rocket science and easy to do. Turbo tax walks you through everything. I accelerate some depreciation like new floors, driveways, fences etc and turbo tax remembers the values and automatically deducts the expenses for 5 years or however long the depreciation schedule is for. I pay a little extra for audit defense in case I'm ever audited. They do it all and will represent me. It's actually kind of fun to do each year and I don't mind doing it.

    3Reply
  • Account Closed
    Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes
    2y
    Quote from @John Morgan:

    @Jason Sung

    I have 25 SFR that I self manage and do taxes my with turbo tax. It's definitely not rocket science and easy to do. Turbo tax walks you through everything. I accelerate some depreciation like new floors, driveways, fences etc and turbo tax remembers the values and automatically deducts the expenses for 5 years or however long the depreciation schedule is for. I pay a little extra for audit defense in case I'm ever audited. They do it all and will represent me. It's actually kind of fun to do each year and I don't mind doing it.


     Welcome to the "weirdo" club of people who think taxes are fun :D Me and all the other accountants on BP welcome you with open arms into our tribe of misfits 

    1Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    2y
    Quote from @Account Closed:
    Quote from @John Morgan:

    @Jason Sung

    I have 25 SFR that I self manage and do taxes my with turbo tax. It's definitely not rocket science and easy to do. Turbo tax walks you through everything. I accelerate some depreciation like new floors, driveways, fences etc and turbo tax remembers the values and automatically deducts the expenses for 5 years or however long the depreciation schedule is for. I pay a little extra for audit defense in case I'm ever audited. They do it all and will represent me. It's actually kind of fun to do each year and I don't mind doing it.


     Welcome to the "weirdo" club of people who think taxes are fun :D Me and all the other accountants on BP welcome you with open arms into our tribe of misfits 

    Haha! Yeah, I don’t mind it at all. And I’m old school with pen and paper with receipts jammed in folders for each property. But it’s easy to do and fun to compare the performances of each property to the previous year and see how all the write offs cancel all the profits. lol 
    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    2y
    Quote from @Jason Sung:

    I have a W2 job (my wife stays home and I have two kids) and owns a few SFH as rental. I did tax return last year (including buying two SFH houses, selling one house) through a CPA and he charged me ~$1000. Is this amount normal?

    It seems TurboTax® Premier is for RE investors to file tax by themselves. Is this a good option, instead of relying on a CPA? 

    $1000 and filed accurately, on time?  You got off easy.

    Many have much higher minimums and are so busy or whatever they need to extend.  More $ plus indigestion until October.  Woo-hoo.

    Software can easily handle your needs, but it's only as good as the inputs you give it. 

    I've always done my own with software,  but I'd probably keep the competent, on-time $1000 preparer if I could.  There's value in a professional to an extent.  $1k seems worth it.

    Be ready to self-prepare when they get famous, charge $5k, and need to extend. 

    2Reply
  • Kory Reynolds
    Accountant · NH · Member since 2019 · 269 posts · 288 votes
    2y

    $1,000 is more than in line for tax prep.  Turbo Tax for a full service paid advisor now is something like $1,500 if you pay full price, and that is with you getting some random preparer that you won't get the same one each year, won't be available throughout the year, and isn't going to take the time to strategize and help it get done.  I can say with certainty a firm like mine couldn't touch a $1,000 fee on any scope of work, we would be several multiples of that to sign up a new client.  

    Turbo Tax works well in simple situations.  Very simple situations.  The number of missed deductions or incorrectly deducted items on Turbo Tax returns far outweighs the number of times I've seen 100% Turbo Tax returns that includes rentals.  My favorite is where they used TurboTax and missed PFIC foreign disclosures on their hedge fund K-1s, about 50 such disclosures completely missed year after year.

    @Michael Plaks post is spot on - it isn't a payment for a return on investment, is a payment so you don't have to do it yourself, you know it is done right, and you are working with someone who can help you report in the most advantageous manner.

    1Reply
  • Troy P.
    Investor · Baton Rouge, LA · Member since 2019 · 184 posts · 167 votes
    2y

    I used TurboTax full service last year.  I was given an older gentleman who was clearly retired and doing this gig to stay active.  It took him days to sort through all of my documentation for my two rentals and relatively simple return.  In the end, he sent the summary numbers, and they looked way off.  Somehow, somewhere (I only saw the summary), he left out a huge chunk of deductions and once corrected, it turned into a $6K difference.  I essentially did the whole thing myself and had to pay over $700.  I filed a formal complaint and received a moderately sincere apology from upper management.  I wonder how many people they actually screwed over because they were ignorant?  Never again...

    3Reply
  • Bette HochbergerBusiness Member
    Accountant · 33301 · Member since 2022 · 57 posts · 43 votes
    2y

    That amount is normal for a CPA, I think that's actually a pretty fair price considering you own a few rentals. 

    [email protected]954-639-4060
    Bette Hochberger, CPA, CGMA4.622 Reviews
    WebsiteView Page
    0Reply
  • Jason MalabuteBusiness Member
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 900 votes
    11mo

    it’s worth paying a CPA. The $1,000 fee is reasonable — it’ll cost you far more if you make mistakes, miss deductions, or get audited later on.

    Malabute & Company CPAs525 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free