New home owner filing tax return

6 Replies

I bought my primary home in may and this is the first time I’m going to be filing my tax returns that’s more than just my income from my job. I usually go to H&R block but wanted to try to find a local accountant to help me with this. I wanted to know from other home owners if it’s worth it going to a local accountant or just quickly go to one of these franchises? I assume an accountant will be more expensive but will be more detailed as H&R Block is a quick in and out and I feel like I’m not getting my moneys worth.

All I will say on this is that 90% of the time, I find mistakes on tax returns prepared by H&R Block.

My recommendation is get with a good CPA

@Joe Capobianco

Usually just owning a primary residence does not make your return any more complicated because you can’t take any depreciation. 

The only difference now is if you take itemized deduction, you will get numbers for an interest, tax, and points paid from the form that bank will send you and you just input it in the software. 

Not trying to convince you to do your own return if not comfortable. 

But just just owing a primary residence does not create any tax planning opportunities that warrants an accountant. 

My personal opinion. 

If few hundred dollar is not a issue, you might as well go to accountant assuming you will start on REI.

Originally posted by @Joe Capobianco :
H&R Block is a quick in and out 

You have summed up their value proposition in just a few words. They can get you in and out quickly - it's the only category they do well in. Most people think the price will be better because they are big, but that is almost never the case for comparable service at a local establishment. I worked at The Big Green Square for a season, and I was often shocked at the prices we would charge for very simple returns. (Drive by a local store and ask yourself how they can afford the rent on so many offices that are dark from late April until January.)

You don't need a CPA because you bought a house. That's overkill. Depending on your real estate investing plans, it might be beneficial to begin a relationship now with someone who can provide you with the accounting services you'll need in the future. Otherwise you're likely to be paying for skills your tax preparer isn't using on your return.

Many tax preparers offer a free review of your tax return. You can do your taxes yourself and then take it to one (or more) of them for review. See what they say. Maybe you'll save a few bucks this year and find someone you want to work with in the future.

Congratulations on the House! Best of Luck on Your Journey!

@Ashish Acharya thank you for the advice

@Paul Allen “Depending on your real estate investing plans, it might be beneficial to begin a relationship now with someone who can provide you with the accounting services you'll need in the future. Otherwise you're likely to be paying for skills your tax preparer isn't using on your return.”

This was the reasoning for my post. This will be my future rental but wanted to build a relationship with an accountant and learn from them on what I can and can’t deduct as well. 

 I wasn’t aware tax preparers offer a free review of my tax returns. Thank you all for the help. 

@Joe Capobianco

Congrats on the new home purchase!

You should be receiving a 1098 from your mortgage company that will reflect any mortgage interest, real estate taxes and mortgage insurance premiums paid to the mortgage company.

You will report these amounts on schedule A.

Calculate how much Itemized deductions you are entitled to and compare it to the standard deduction. You will want to use the one that provides you the greater deduction.

Another note it to look at the HUD statement. There may be instances that you paid interest/real estate taxes that are not reported on the form 1098.

Also - if the mortgage company does not pay the real estate taxes - you will want to make sure you report the amount that you paid on schedule A.

Feel free to ask me any questions at the time that you prepare the tax return if you decide to self-prepare it.

Basit Siddiqi, CPA
917-280-8544

Like my colleagues mentioned, H&R returns are often ridden with mistakes, even for relatively simple situations like yours. But so are returns prepared by some professional tax firms, including CPAs and EAs. In fact, there're CPAs and EAs working for H&R. I know some very good people working for H&R (I don't know why they work there though, haha)

The key is to find a competent person and create a long-term relationship, just like in any other important area: doctors, mechanics etc. The chance of finding such person in a small tax firm is higher than in a chain store (notorious for high turnover) - but you still need to check competence.

Not everyone does a free review, but if you can find someone who does - it's a good way to verify that you got a quality job.

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