A new client came to us last month after a few years of preparing his own returns.

He owns a rental property, and when he switched from a paid preparer to doing it himself, three things slipped through the cracks.

First, he stopped claiming depreciation on the rental. Depreciation is one of the biggest tax benefits of owning real estate, and skipping it left over $50,000 in losses unreported. That's worth roughly $15,000 in tax savings. Worse, the IRS reduces your basis by the depreciation you were entitled to claim whether you took it or not, so skipping it doesn't save you anything later when you sell.

Second, his suspended passive activity losses never made it onto his returns. Those losses don't disappear when they can't be used in a given year. They carry forward until the property produces passive income or is sold. But tax software won't know they exist unless you enter them.

Third, he had been taking the standard deduction when itemizing would have saved him more. Between mortgage interest, property taxes, and charitable giving, itemizing was the better choice.

We corrected his 2024 and 2025 returns, and his combined refunds came to over $8,000, with the recovered depreciation and losses positioned to keep saving him tax going forward - up to $15,000.

Doing your own taxes can work well for simple situations. Once rental property enters the picture, a professional review can pay for itself.

#TaxPlanning #RealEstateInvesting #RentalProperty #CPA #Depreciation #PassiveLosses