Turbo Tax for Investors?

[Kevin Siedlecki]

Does anyone with multiple LLCs and multiple properties in each use TurboTax?

I have two LLCs with multiple properties in each, and I am pretty confident in my ability to enter the data myself after doing it with an accountant for the last couple years. Basically, I sit in his office for 2 hours and feed him the numbers, he plugs them into a program, and then charges me $1000. I saw that TurboTax has a self-employed/business option. Has anyone had success with it?

[Dave Holland]

Hi @Kevin Siedlecki

As a CPA I tell people all the time when they don't need a professional to prepare their taxes.  For example those with W-2 wages, own a home, and maybe have some investments.  There is no reason a person in that situation shouldn't just use TurboTax or a similar tax prep software.  Some go for it on their own and some still just want to assurance of a professional to be sure it is done right.

When you get into real estate or other self-employment, that is when I generally think it is necessary to use a professional.

I do see your point, though. If you just read off numbers at the end of the year and have to pay $1k for your return to get done,  it doesn't seem worth it.  That doesn't sound like a great client / accountant relationship.

The value in working with a CPA should be their knowledge, not just processing the return.  You should be able to ask questions throughout the year, and the CPA should help strategize for maximum tax efficiency, in addition to taking care of all of your filings accurately. Your CPA should feel like a part of your team. I would probably try to find a different person to work with if I was in your shoes rather than trying to do it all yourself.

Just to answer your question more directly, I've seen a lot of non-accountants try to use the TurboTax for business software and almost never right. 

[Kelsey Breedlove]

I agree with @Dave Holland. There's a lot of good a CPA can do for you -- but having someone that just plugs in your numbers once a year and doesn't provide any additional value isn't it. Time for you to start shopping for a new CPA. 

[Steven Hamilton II]

Originally posted by @Kevin Siedlecki:

Does anyone with multiple LLCs and multiple properties in each use TurboTax?

I have two LLCs with multiple properties in each, and I am pretty confident in my ability to enter the data myself after doing it with an accountant for the last couple years. Basically, I sit in his office for 2 hours and feed him the numbers, he plugs them into a program, and then charges me $1000. I saw that TurboTax has a self-employed/business option. Has anyone had success with it?

 Kevin to add to what @Dave Holland was stating. My clients don't pay me to do data entry. They pay me for the advice I give them. A box doesn't give you adequate advice especially when you are dealing with multiple businesses and properties etc.

You have to decide if you want an advisor or a box. You do get what you pay for.

[Kevin Siedlecki]

@Steven Hamilton II - Yes. And it seems like right now I am paying advice rates for a box!

[Dave Toelkes]

If your LLCs are single member LLCs treated as disregarded entities for tax purposes, then your rental activies are reported  on Schedule E (1040) as if the LLCs did not exist.  For this, TurboTax Premier is adequate to prepare your tax returns yourself.  

If your LLCs are partnerships or corporations, then a competent tax preparer can prepare the partnership or corporate tax returns for you for much less than $1K.  

I agree with the other posters, if you are only using a CPA to prepare your tax return, then you are under utilizing the CPA but paying full cost for his/her time.

[Jim Kennedy]

I am a CPA and I am a real estate investor (buy and hold in NJ and until recently Texas, too). A good CPA as stated should not just do input. He or she should ask open ended questions to uncover tax savings. Because I invest in real estate (for 12 years) and have prepared tax returns AND done tax planning with over 400 investors I know what questions to ask so things dont go unnoticed. 

When I get a self-prepared return thats a mess, I ask why this amount is here, and the most common response is " TurboTax asked me for it" not realizing what the tax code is really asking.

The other good reason to consult with a CPA is for planning. Once 12/31 goes by, my options to offer you are severely limited. The 5 P's of the Marines teach us Prior Planning Prevents Poor Performance, so be aware. Many investors put on their tax or accounting hat last, and this can be costly.

Jim Kennedy, CPA

[Damon Wong]

@Kevin Siedlecki Recycling this thread, but curious what direction you went.  I'm in the same boat you were in when you posted this.  So this year, I'm just trying to find good software to file my multiple LLCs (partnership) & rental properties.  I'm in the hunt for a solid CPA, but right now I'm paying that "advice rate" for plug & play data entry.

[Bill Hampton]

Damon,

 I recommend finding an accountant who specializes in real estate taxation. You may want to consider working with your accountant remotely to expand your options.

I would also recommend looking for a tax strategist who is willing to work with you throughout the year, not just when preparing your tax return. You want an accountant that can help you strategize and who is responsive when you want to know the tax consequences of the decisions you are making throughout the year.

Good luck and let me know if you have any questions.