Real Estate Investor - Standards Deduction?

Question

BP friends,

Just want to get your take on things: I am fairly meticulous when it comes to record keeping (or at least record keeping catch up around tax time) and still find myself looking at a better deduction using standard rather than itemized.  Now, the 2017 tax law did trigger this shift for my situation, but just curious to know about others.

Additionally, as I add a third property I believe I am ready for more professional tax assistance.  My profession has frequent moves with occasional business expenses and government benefits (including tax benefits).  If anyone has a recommendation for a good CPA, perhaps with experience with diplomatic or military families, would be greatly appreciated.

Wishing you all a wonderful start to 2021!

Joshua McMillion · Answer

@David Epstein

I just decided to pull the trigger on a tax professional and landed on Brandyn Cox of BMC accounting. He is a military (army, the best) veteran and specialized in real estate. He just completed my 2021 taxes and I am very happy with his systems, communication, and availability.

Sincerely

Josh

Basit Siddiqi · Answer

@David EpsteinThe standard deduction did increase from the tax reform.In 2020, the standard deduction for single was $12,400 and $24,800 for married filing joint.That means, that your itemized deduction would have to be larger than those amounts to benefit from itemizing.There is a potential for us to go back to the old system under a change in office.Also, it is important to consider your state tax laws. Many states did not adopt the federal tax law changes. You may be taking the standard deduction for federal but itemized at the state level.

Sachin Amin · Answer

@David Epstein I personally have a CPA who does my filing for all my REI and I would recommend looking at local classifieds(google locally - you will find very knowledgeable cpa's and you can check out their reviews) rather than fancy names or out of state CPAs who will charge you a bomb. I pay appx $500-$600 on CPA (for jointly filing and 7 units between 2 LLCs - my CPA has all my details as I have been filing with him for couple of years) it saves me time and hassle and if anything goes wrong or any audit I know who to call. But most of the REI do on their own using Turbo tax but I am definitely not one of them, I would rather spend my time researching or listening to interesting podcast which would add value or help me in making my next deal.

Happy Investing!!!

Real Estate Investor - Standards Deduction?

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