Have anyone use turbo tax to file for tax?

Question

Bigger pocket members,

How do you file for tax return for newbie? I only have two rentals. One in Memphis and another is Cleveland?  Anyone recommend using turbo tax?   Hiring cpa can get expensive so trying to find the best economical way?

Thanks in advance for your advice!

-Kevin

Jake Hottenrott · Answer

@Kevin Zhang - I second what @Natalie Kolodij says.  TurboTax is a platform built to follow a very narrow path of tax questions and answers.  It doesn't always say "did you consider this?" and it definitely doesn't tell the user "you can't do that!".  Yes, you can definitely use TurboTax to do your returns, what we do isn't theoretical physics, quantum mechanics or advanced mathematics.  A tax focused CPAs job is "clearly" (I use that tongue in cheek) laid out in the 70,000 pages of the Internal Revenue Code and is supported by many thousands of US Tax Court Cases, Revenue Rulings, Rev Procs, Private Letter Rulings, etc.  A Real Estate Investing focused tax pro is focused specifically on that parts of those that affect you directly.

Specific to your situation you have multi state issues going on, you live in California (which can be a fun tax return in and of itself), and you have rentals.  If you are going to stop at 2 rentals, it may be worth it to pay a CPA to review your return in the offseason and provide you with notes on what you did wrong or an all clear.  On the other hand, if you are chasing financial independence and are going to keep adding properties you may want to have a professional by your side to help you plan.  That plan may be "expensive" today, but it will look cheap when you've been able to apply the plan and maximize your tax savings.

Best of luck and keep us posted as you grow your portfolio!!

Natalie Kolodij · Answer

It depends on your knowledge of tax law and how important maximized tax benefits are to you vs. being compliant.

I amend a lot of self prepared returns because turbo tax didn't ask the right questions, or the person mis understood what it asked.

I also see a lot of TT returns that miss out on some expenses/ deprecation options ect

Your CPA should be providing you more value than they're costing you.

Michael Plaks · Answer

@Kevin Zhang

I will disclose a well-protected secret: we tax accountants all quietly use TurboTax to prepare clients' tax returns and Facebook to get answers when our clients email us tricky questions. But don't tell anyone, promise?

Dillon Dale · Answer

@Kevin Zhang highly recommend using a CPA. A good CPA will save you way more than they charge

Nicole Heasley Beitenman · Answer

You could probably get by with it, but it's necessary to build a good relationship with a CPA if you want to scale. Turbo Tax won't help you throughout the year when you're wondering what the tax implications will be as you make business decisions. I have an accounting degree and had to switch to a CPA this year because the complexity of my own return's exceeded what I learned in Tax 101 five+ years ago.

Basit Siddiqi · Answer

@Kevin ZhangTurbo tax is a great software to use if your tax profile isin't too complicated.If you had a W-2 and maybe interest or dividends from Banks/Stocks. Turbo tax will likely do a decent job.However, once you get into rental properties, you may want to look to connecting with a tax professional.Your tax return is a little bit more complicated, you have a couple rental properties and you may have some non-resident state tax filings. In addition, Ohio does have some local/city tax returns that you have to see if you are required to file.

Danielle Wolter · Answer

So I use Turbo Tax, but am an accountant myself and have a very strong grasp of taxes so I know what needs to go where. If you don't have a good grasp on tax law, I would hire a CPA. The expense is worth it.

Steve Vaughan · Answer

It's all GIGO or not. Garbage in, garbage out.

I've had good results with TT, but my inputs are solid and I don't deal in 3 different states.

Without knowing your tax knowledge or background and working in multiple states, I'd get a pro.  A good DIYer knows when to hire a specialist and BP has many.

Remington Lyman · Answer

@Kevin Zhang I hired Account Closed to take over my tax planning. He specialized in working with real estate investors and is one himself.

Dillon Dale · Answer

Yes, those are reasonable prices. Especially since you're located in the Bay Area. It's similar to what I pay in the Midwest

Have anyone use turbo tax to file for tax?

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