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New investor: What do I do with tax season approaching?
I purchased a triplex in July. I am a teacher don't make a ton of money. What should I do about tax season coming up? Do I need a CPA? Or should I do taxes myself? I have no clue of what I should do as a newbie. I bought the tax book from BP and its great but I would love to get advice from the BP community. Thanks!
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#5 Tax, SDIRAs & Cost Segregation Contributor
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- Atlanta, GA
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#5 Tax, SDIRAs & Cost Segregation Contributor
- Accountant
- Atlanta, GA
A good CPA should always be able to add value. That said, depending on your current property's economies of scale a good CPA might not be in the cards right now.
If you're willing to do the research you'll probably be able to DIY your return reasonably correctly with the upper-tier versions of TurboTax, etc. The most important thing will be making sure you place the property in service correctly and appropriately classify yourself regarding the passive activity loss rules (i.e. if you are a full time teacher generally you won't be a "real estate professional"). A good way to check the latter...if the property produces a net tax loss on your schedule E, a Form 8582 should also be generated by the software.
Stay away from "cheap" tax return preparers. They do more harm than good. A material number of my new clients need amended returns because their prior professional wasn't up to snuff. Price is what you pay, value is what you receive. It's not a commodity business.
Best of luck.