TurboTax vs. CPA for only one rental?

Question

Hi all,

I just bought my first rental property this year, so it'll be the first time filing taxes with this. My primary W2 is pretty basic and have always used TurboTax, but now that I have this rental is it better to get a CPA or TurboTax should still work with just one property? Any advice is much appreciated!

Nicholas L. · Answer

@Brandon Garcia I think I hired a CPA when I got to 5.  I think it depends on your overall tax situation and if you have anything else complicated.  One property is not at all difficult to do yourself.

Daniel Tanasa · Answer

Hey Brandon,

A CPA usually pays for itself and a few times over from the extra deductions and savings he is able to provide by knowing the system. I would probably recommend going with a CPA even if you have only one property. If is a easy tax file they won't charge too much either.

Good Luck!

Rohullah Sharifi · Answer

Tax Professional can serve your interest better through experience, knowledge and practice in the field. Would recommend professional service, cost some money, but worth it.

Jason Malabute · Answer

If you have any plans to grow your rental portfolio, I’d recommend working with a CPA right from the start. TurboTax can get the job done for simple filings, but if something gets entered incorrectly, fixing it later usually costs more. A CPA can set you up on the right foot from day one and make sure your foundation is solid as you expand.

Carini Rochester · Answer

I used TurboTax, or something like it through three or four properties, then hired a CPA after that. I used (use) a bookkeeping program to keep track of every transaction and every mortgage whether or not I would be doing my own taxes. I think excellent bookkeeping and accounting are essential in REI.

Ashish Acharya · Answer

Congrats on your first rental! You’ll probably be fine using TurboTax for just one property, but here’s something most people don’t think about: the first year is the most important because you’re setting your “starting point” for depreciation and basis. If that’s off, even by a little, it can snowball over time and make things really messy and eventually cost you more money when you do decide to work with a CPA or if you sell down the road.

One option you could try if you're not sure is having a CPA handle just that first year to get everything set up correctly (basis, depreciation schedules, categorizing repairs vs. improvements, etc.). After that, if you don't see the benefit, you could go back to TurboTax if you’re comfortable. That way, you’ve got the peace of mind that your foundation is solid without feeling like you’re committed to paying CPA fees forever. However, in my experience, the CPA fees typically pay for themselves when it comes to rental real estate. I always tell people that paying for a CPA is like paying $10 for a $100 bill.

If you already know you want to grow your portfolio, then it’s worth sticking with a CPA from the start. But if this is a “one and done” rental for now, setting it up right once can save you headaches later.

Josh L. · Answer

@Brandon Garcia depends on the value of your time / desire for ongoing advisor but I would say 3+ would be when to shift.

Julius Vincent · Answer

@Brandon Garcia - You can definitely still use TurboTax with just one rental. As others have said, it just gets a little tricky when doing basis tracking (e.g., including all the right costs in your starting basis and keeping up with improvements over time). But as long as you're comfortable with entering everything and keeping good records, you should be fine.

Us CPAs are handy if you want peace of mind, aren't sure about deductions (like repairs vs. improvements), want someone else to set the first year up correctly, etc.

Ashish Acharya · Answer

One more note: Clean books and organized records from the start make everything easier, whether you stick with TurboTax or work with a CPA down the line.

TurboTax vs. CPA for only one rental?

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