I have searched the forums and blogs on the subject, and it seems to be slightly leaning toward CPA/professional preparation. I have used a professional for the last 10 years and each year, my costs have increased (we are charged by the form, so with more forms [more properties] comes more cost). Because I have had what I believe to be competent preparation in the past, I am considering the option of using those previous returns as a customized guide for self preparation this year. I may give up halfway through and decide to acquire a professional before the deadline next year, but I feel like it's something I should try. I am aware of the business version of turbotax and I also saw a reference to taxact.com as a method for personal preparation. • My situation is: • I have 5 SFH all occupied. 1 was acquired this year (rehabbed then rented). • I have 1 duplex acquired this year (neither side rented yet - completing rehab and expect to rent in the last month of the year or first of 2017). • I have a full time job. • My wife has a part time job. • We are a sole proprietorship regarding the business organization. • My total cost for preparation last year was $865. Please comment...will you: • Use a professional for your tax preparation, yes or no? • If no, what software, program, method will you use to prepare your taxes? • If yes, what do you expect to pay as SP? • If you prepare your own taxes, what has been the biggest help, learning moment, best advice you would pass along to a fellow investor. Thank you for your time, and as always, I appreciate this community, the encouragement, and advice!

My wife is a dental hygienist and cleans my teeth at the house. My brother in law is a physician and does my well checks.

I still do my own. I put in the work keeping good records throughout the year on my little rental property manager software (which is so old it won't update anymore:) so the filing itself isn't too bad. I have an s-corp, 2 LLCs and 34 rentals. Sometimes I consult and wholesale through my s-corp, but it's not anymore work to add a little more income to a line. I don't bother keeping track of mileage or a home office. Because of depreciation mostly, my effective tax rate has been negative for 14 years anyway. I use turbotax premier and business. I know CPAs laugh at it and whatnot, but for less than $200 annually I have survived so far. To try and break-down and explain to a pro all aspects of what I'm doing would take weeks, so I plan to continue going solo. More tax deductions isn't what I need, so I'm ok not fighting for every last little write-off. I err on the side of caution if I'm unsure. @Kurt Gardner - for like $30 you could get a basic rental property mgt software to help you. Super easy to use and will populate turbotax for you. I use QRM. Quickbooks will take a semester of advanced college to master. LOL Keep up with it throughout the year so you can enjoy some spring weather at tax time!

I hope your uncle is not a proctologist...

@Kurt Gardner I'm a bit biased, as I'm a tax pro (Enrolled Agent), so yes I will do my own taxes, and I tend to recommend that others hire pros to help them. However, if you feel comfortable doing your own, and it's not a just a "I don't want to pay $xxx for someone to help me", by all means go for it. It sucks that you've been burned before - I totally get how that can make anyone not want to go back (same goes for any other professional service). I have a number of friends who do their own taxes (and their situations range from super simple (1040 + Sch A) to more involved real estate and investment matters) and as long as they are satisfied with the outcome, I advise them to continue doing what they're doing. Until they mention something to me that sounds illegal, lol. One note I'd like to make for the DIYers is that should you run into issues, it may end up costing you more to have a pro help fix it than if you had enlisted their help to begin with. In the firm with which I work, the cost to have a return "reviewed" is the same as if we prepared it - because we will do the return from scratch to pinpoint the errors. And then charge on top of that to move forward with rectifying the issue. So now you're looking at a charge to redo the return, likely amend it ($xxx), and then possibly file a POA for prior years ($xxxx), and then actually execute on the representation ($xxxx). I know every firm is different, but it is something to keep in mind. @Natalie Kolodij I write all of the abatement offers for the firm I work with, and it really is amazing what ends up being accepted. The IRS is surprisingly broad in what counts as a justifiable reason for incurring a penalty.

No, all of you BPers, none of you people are self-preparing this year, or ever again, because I don't want to deal with garbage non-compliant self-prepared tax returns! :P Get a tax pro, and declare your income honestly, unless you want to sabotage yourself from getting a mortgage within the next 36 months. Does anyone here have any further questions about how and why the are NOT doing their own taxes this year? I will be happy to explain in further detail about how I have $750,000 right here just for you to buy a fourplex with, but you're (probably) not getting a single penny of it if you self-prepare your tax returns. :) Do you want $750,000, or not? Oh, you do? You want this $750,000? This $750,000 right here, you think it's pretty and green? To be clear, you're telling me that you DO want this seven hundred and fifty thousand dollars? This right here, you want some of THIS? OK, glad we have that clear. Great. Then.... Hire a tax professional to do your dang taxes! It'll probably cost you three quarters of a million dollars of funding if you don't heed my advice. This is not a negotiation, this is a fact.

Hey Kurt, I just finished my vetting process and selected Brandon Hall. He's a BP member, regular blogger on the site, frequent poster and real estate specialist. We will see how it turns out. I went through a more extensive process than I had anticipated but I never found the right fit until I spoke with Brandon. I vetted local firms and many of the real estate CPAs who market nationally through various channels (podcasts, books, blogs, articles, BP) and Brandon stood out from the others. First off, I spoke directly with him rather than a "client services" intake individual...with many of these firms, you don't get to speak with tax preparers. Second, and most importantly, he told me how he would handle my specific tax items so that I knew generally what his position was and, in turn, what I was getting. The other intake calls were too general, even when I pushed for specifics. I understand that you can't cover everything in a 30-45 minute consultation but, for a part-time investor with a W-2, you can cover a lot of ground in that time. If you are going to spend the time, may as well get started with the real stuff. Brandon's consultation was more like a consultation under retainer than a general intake consult. In my opinion, he markets differently than some of the others...he provides in depth actionable answers and that demonstrates expertise whereas some of the others provide a lot of basic content to get you in the door and you have to retain them to find out how they would handle your taxes. I value clarity and depth...we are too busy (and too smart) for fluff.

@Gerald Peters your funny.... we all have things we like to do ourselves.. for me I like to fly my own airplane don't want someone doing that for me... I have an electric car so I don't need oil changes or pump my own gas. I love to work in the yard I spend half a day each weekend tending my gardens half the year... I tear the paper towels in half so I don't waste them.. I was a apprentice painter once but hated it... also sold fuller brush's door to door.. pumped gas , bagged groceries... etc etc.. but I found my calling in Real estate sales and I rather like that and finance and building.. And I agree with you I am not a big asset protection guy.. LLC and umbrella keeps me sleeping at night .. I don't need an LLC for each prop like some espouse . But what I won't do is do anything that will bring the wrath of the IRS down on me... and I have zero interest in tax returns or even looking at them other than to see GROSS income and taxable income as it relates to how much money my bank will lend me.. :) We all have our things.. nothing wrong with doing your own tax's taking title in your own name and self insuring ones self.. If I had a bunch of rentals that were paid for I would not have fire insurance I can tell you that I would just have liability. And running rentals really has no interest to me personally.. so we like different things.

Tax, SDIRAs & Cost Segregation

9yFollow

Will you do your own taxes this year?

Kurt Gardner

Investor · Maryville, IL · Member since 2016 · 129 posts · 81 votes

I have searched the forums and blogs on the subject, and it seems to be slightly leaning toward CPA/professional preparation.

I have used a professional for the last 10 years and each year, my costs have increased (we are charged by the form, so with more forms [more properties] comes more cost). Because I have had what I believe to be competent preparation in the past, I am considering the option of using those previous returns as a customized guide for self preparation this year.

I may give up halfway through and decide to acquire a professional before the deadline next year, but I feel like it's something I should try.

I am aware of the business version of turbotax and I also saw a reference to taxact.com as a method for personal preparation.

My situation is:
I have 5 SFH all occupied. 1 was acquired this year (rehabbed then rented).
I have 1 duplex acquired this year (neither side rented yet - completing rehab and expect to rent in the last month of the year or first of 2017).
I have a full time job.
My wife has a part time job.
We are a sole proprietorship regarding the business organization.
My total cost for preparation last year was $865.

Please comment...will you:

Use a professional for your tax preparation, yes or no?
If no, what software, program, method will you use to prepare your taxes?
If yes, what do you expect to pay as SP?
If you prepare your own taxes, what has been the biggest help, learning moment, best advice you would pass along to a fellow investor.

Thank you for your time, and as always, I appreciate this community, the encouragement, and advice!

1 Reply

171 views

Will you do your own taxes this year?

Will you do your own taxes this year?

Most Popular Reply

78 Replies