Have you used Upwork and Turbotax to get your taxes done?

Question

Hello,

Have you used Upwork to get your taxes done? Tax preparation is complex, but TurboTax Software really takes the guessing out of it. Especially, after reading Every Landlord's Tax Deduction Guide - Stephen Fishman.  We used a CPA last year, and I had to sort and provide all the info for Schedule E and I still take all liability in case of an audit.

BTW, what's the cost of an audit?  Is Turbotax audit defense worth it?

Thanks,

Frank

Frank S. · Answer

@Basit Siddiqi,

They get kick backs and commissions from the fund providers, of course. Unfortunately, that's the standard practice for financial advisers in the US.  The upcoming DOL Fiduciary Rule should address that, unless our Goldman Sachs government cans it.

My weakest point is to input previous years info into Turbotax as it relates to  4562 (schedules) and carrying over the 8582.  The rest is simple if you know - or think you know- the rules.

I will definitely hire  a CPA when we approach a 1031XCs or a sell, but so far, it's all the same and unless there is a drastic change in the law, it should be a copy/paste/repeat process.

Well, that's my plan, I may still hire someone for this year.

Thanks,

Frank

Basit Siddiqi · Answer

@Frank SanchezYikes - they are prolly getting a commission for every client that signs up. I am sure there are CPA's who can teach you how to prepare a tax return. Preparing a tax return is not rocket science. You can view the forms and instructions(might take a while but they are there).The true value of a CPA comes where they can do the following1) inform you that you may be missing some expenses based on experience in the industry. You can't imagine how many investors I worked with where they simply left closing costs(title costs, lender fees) out of basis calculation.2) Inform you of any strategies to reduce your tax liability.

Most real estate Investors file the following forms(individual Level) just in case you had time to read some instructionsSchedule E - to report your rental incomeForm 4562 - To report/calculate depreciation expense on your tax returnForm 8582 - to report any losses that are suspended if your income is above $100,000

Frank S. · Answer

@Linda Weygant, that's spot on.  I reminds me of  a quote by my favorite guy, Benjamin Franklin.

Although, this is more than saving $400, it's about learning more.

@Basit Siddiqi, Absolutely.   I am planning on withholding my personal information.  They will work on the info I provide for Sch E categories, depreciation schedules and 4562. I can handle from THL to 1099s, W2s, etc.  My wife and I can eventually take over the tax preparation and consult with a CPA as needed.

We used a CPA last year and can read the forms. It all makes sense. I guess we need a helping hand to make the transition to DIY.

I haven't checked, but are CPAs in the US willing to teach investors how to DIY? Is it worth their time?  I paid $400 last year and they did a fine job.  Unfortunately, this year we got a letter with absurd non-fiduciary high expense ratio investment options from them.  You know, the "suitable investment advice" not fiduciary advice.  I will not work with them for that reason.

Frank

Basit Siddiqi · Answer

@Frank SanchezI am pretty sure there are some qualified people on upwork. Whether you pick an accountant at accountant locally, through BP or on upwork - you need to check the credentials of the person you choose.Does he have credentials? (CPA, EA, or a Masters in Tax?)How long has he been doing taxes?Is he capable of providing you advice to save on taxes?Please be mindful that you are providing a lot of sensitive information to an accountant to do your taxes(social security number of you and your family along with DOB and income). You don't want that information in the wrong hands.If you pick an accountant through upwork - you may still have to sort and provide all the info to your accountant.

Have you used Upwork and Turbotax to get your taxes done?

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