First time landlord here. I have been using turbo tax for 10 years using itemized deduction for my personal income tax. Last September 2017, I bought another home and converted my primary residence (since 2011) as rental. I just finished doing the taxes using Turbo Tax premier but I was wondering if getting an accountant will give me better return. I think if accountant use the same papers I entered then the tax will be the same unless there might be something that Turbo Tax may not be covering that the accountant knows.
I had problem getting the cost of land as I don't have a copy of the first tax bill when I purchase the home. The oldest property tax bill I have is 2013 so I guessed the cost of land for 2011 just a few thousand lower than the 2013 cost of land. Will that be an issue with the IRS?
Also, I added a synthetic turf and retaining wall (around $5,000) in April 2017. I don't have receipt anymore (lost them during our move) but I have quotes that was emailed to me. Will I be able to use that as receipt? Or since the work was done before it was rented, will it even affect the depreciation base value?
Do you have CPA recommendation in National City or Chula Vista area?
How much will it cost for a CPA to do my taxes?
@Chris Ghemm Congratulations on getting into real estate investing!
I have found errors on 100% of the self-prepared tax returns landlords bring me to review. Does that mean no one can prepare their own taxes and get it right? Absolutely not. People are bringing me their returns to review because they suspect there is a problem. Either something doesn't 'seem' right, or the IRS has sent them a letter saying 'there's a problem'. The fact that I find errors all the time just means that it is complex, and 'you don't know what you don't know'.
You may want to find a tax professional who will review your tax return. Some will do this for free. Google around and find one. You may not need full service with just one property, but if you are planning to acquire additional properties it can be beneficial to develop a relationship with someone now.
Best of Luck with Your Real Estate Investments!
@Chris Ghemm - A good accountant is an absolute must. Please treat this like a business and not a hobby by using Turbo Tax again.
My accountant costs me about $1,000. This includes tax filing for this yea and next and a few tax planning sessions throughout the year.
Take your completed tax returns to a few accountants for review. The answer should be obvious after that.
Doing a tax return by yourself in turbo tax is okay if your return is simple(ex W-2 with some interest/dividend income). However, you should reach out to an accountant once your return gets more complex.
An accountant should be able to provide you tax strategies in addition to preparation of your tax return.
In regards to the turf and wall updates - can you go back to the contractor and request an additional invoice or confirmation that it was paid.
The $5000 should be added to basis since the update was made prior to the property going into service.
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