We have had our duplex for one year now, and aren't looking to acquire any more properties.
Maybe this is a dumb question, but do I need accounting software (Quickbooks, etc.) or can I just do our taxes with Turbo Tax Premiere (Investments and Rental Property) and call it good?
I keep good records of everything I spend on the property, every dime in and out. I don't care about calculating ROI or doing any property management functions.
Are you talking tenant management software? Like Buildium ect? I don't have an answer but have always wondered as well when people begin to utilize software.
No I don't need tenant management at all. Accounting/tax prep is the only thing I am worried about.
Based on the information you have provided, you have answered your own question. If you are already keeping good records and all you want to do is prepare your taxes, I would have to say NO. Keep doing what you are doing and then, as you mentioned prepare your own taxes using software, if need be, or take your records in whatever format they are in and have your taxes done by an accountant. Hope this helps.
I have five properties and I do all my record keeping using Excel spreadsheets where I categorize all the ins and outs by each property. I maintain receipts and such by property as well. I used to use Turbo Tax but as I have added more properties and plan to add more I starting using a CPA last year. My long winded answer, I think you can easily manage with a basic Excel worksheet. I spend about an hour a month on 5 properties. Generally, there is not a lot going on in any given month.
You can synthesize any good accounting system in Excel, but it won't allow you to pull reports like income statements and balance sheets. I've found that it takes a great deal of discipline and system implementation in order to keep all the data straight.
I like my accounting system because it automatically pulls my bank transactions into the system. All I have to do is pick the right account they go into, and most of the work is already done.
I should have said that in addition to not paying for possibly unnecessary software, I am really trying to NOT hire an accountant, but this may be extremely unwise.
I would certainly be willing to pay an accountant now and then just to look things over.
Again I only have one property. All I want to do is do my taxes correctly.
Has anyone tried turbo tax to handle their rental property and thought it was inadequate?
Just asking here, but why would I need income statements and balance sheets?
You could always geek out on https://www.rentecdirect.com
It's free and if you don't like it then don't use it. I use the free side and like it.
You can use turbotax but I would recommend a CPA. I've used turbotax for years and like it. But, I've gone CPA to ensure I'm not missing anything.
If all you have is a W-2 and one rental property, there's probably no reason to get a tax preparer, but if you're like me and you managed to create a 75 page tax return from a week's work of fighting with TurboTax, then you've probably come to the point where you need to hire help.
Be aware that TurboTax and the other services sometimes just get it plain wrong. I submitted a return one year and was pretty surprised to get a notice of penalty from the IRS about a week later because the program had failed to file a necessary form regarding quarterly payments. A full-time tax preparer would have instantly recognized that this form would have been needed.
As the complexity of your business increases, so does the risk of audit. Hiring a tax preparer that knows how the IRS likes to see things reported will reduce your audit risk by quite a bit. Some expense line items and some forms will increase your chance of getting flagged if you don't know how they work internally. I don't mess around with the IRS.
FWIW, I use both Rentecdirect and Wave for my accounting of rentals. I like Wave because I can shuffle journal entries from personal to my various businesses with a few clicks, so I can assure that everything is filed in the right place.
Thanks for all the help!
@John Doyle I just bought a duplex last December and it's my only rental for now. I bought it with a partner.
I use Quickbooks in my web design firm and thought it best to do the same for my rentals.
I used Landlordaccounting.com to get me started with a sample QB file. It works great.
i like it to because I can run reports and share with my partner and accountant.
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