Hey people anyone knows or anyone can recommend someone that can help me protect my rental profits form the IRS? I’ve been getting taxed to much money on my rental profits. Within these couple of years I have file a lot of tax deductions on repairs on my properties but still ended up paying a lot on my rental profits. I live in Chicago help or advice?
@Alejandro Arreola do you have a tax professional helping you already, or are you doing the taxes yourself? I have an excellent accountant I can recommend if you want to go the professional route. If you are paying that much in taxes then you are doing something wrong (or your rentals are wildly profitable).
@John Warren I don’t do my taxes on my own I do have someone doing my taxes. Would I consider them a tax professional on real estate profits no. And definitely I would love your recommendation on a tax professional and accountant professional.
Are you a professional who makes a high W-2 income. There's limits on what you can deduct based on your income. My wife and I had high W-2 incomes at one point and what we can deduct was severely limited because of passive activity loss limitations. See IRS publication on it: IRS Publication 925
What I did was quit my W2 job and bought a business. People or couples with very high W-2 incomes, and large passive losses would be in your exact situation. Has nothing to do with your huge repair bills.
There are tax professionals who specializes in this issue: Tax lawyer blog
@John Warren john let me know if you can send your contact
Find a good accountant that is familiar with real estate investments. That is about the only advise we can give since we are not accountants and do not have access to your entire portfolio / taxes.
You need a tax pro who specializes in REI, and who does actual tax strategy. Not just filing.
If you send them numbers once a year and they just file- there's no chance of putting any kind of strategy into play.
If your rentals were profitable this year- look on page 1 of your 1040- does it show an amount on line 9 for QBI deduction?
Cannot agree more. I also see a lot of people do there own books and then hand them off to their accountant.
I view this more like a football game, you have to go in with a game plan, have your assistants (book keeper) and tour head coach (accountant) on the same page as you (quarterback).
If you are not communicating, there is no game plan and your success rate for best strategies is most likely very low