Accountant vs. TurboTax (by JB [OR]) Jan 6, 2019 11:14 AM|
Accountant vs. TurboTax (by Richard [MI]) Jan 6, 2019 11:51 AM
Accountant vs. TurboTax (by Bill [NC]) Jan 6, 2019 1:36 PM
Accountant vs. TurboTax (by Larry [MN]) Jan 6, 2019 3:03 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 6, 2019 3:34 PM
Accountant vs. TurboTax (by LindaJ [NY]) Jan 6, 2019 4:06 PM
Accountant vs. TurboTax (by Robert J [CA]) Jan 6, 2019 4:19 PM
Accountant vs. TurboTax (by Barb [MO]) Jan 6, 2019 4:28 PM
Accountant vs. TurboTax (by Beth [WI]) Jan 6, 2019 4:36 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 6, 2019 5:16 PM
Accountant vs. TurboTax (by Ed [PA]) Jan 6, 2019 6:13 PM
Accountant vs. TurboTax (by Robin [WI]) Jan 6, 2019 7:25 PM
Accountant vs. TurboTax (by Smokowna [MD]) Jan 6, 2019 7:36 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 6, 2019 11:50 PM
Accountant vs. TurboTax (by Marv [IL]) Jan 7, 2019 5:12 AM
Accountant vs. TurboTax (by Steve [MA]) Jan 7, 2019 6:10 AM
Accountant vs. TurboTax (by S i d [MO]) Jan 7, 2019 8:16 AM
Accountant vs. TurboTax (by Wilma [PA]) Jan 7, 2019 12:16 PM
Accountant vs. TurboTax (by Marv [IL]) Jan 7, 2019 2:31 PM
Accountant vs. TurboTax (by Nicole [PA]) Jan 7, 2019 3:18 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 7, 2019 3:24 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 7, 2019 3:26 PM
Accountant vs. TurboTax (by Busy [WI]) Jan 7, 2019 3:27 PM
Accountant vs. TurboTax (by razorback_tim [AR]) Jan 7, 2019 4:36 PM
Accountant vs. TurboTax (by Steve [MA]) Jan 7, 2019 4:54 PM
Accountant vs. TurboTax (by JB [OR]) Jan 7, 2019 11:00 PM
Accountant vs. TurboTax (by Patti [MA]) Jan 8, 2019 7:13 AM
Accountant vs. TurboTax (by JB [OR]) Jan 8, 2019 8:05 AM
Accountant vs. TurboTax (by Busy [WI]) Jan 8, 2019 8:08 AM
Accountant vs. TurboTax (by Patti [MA]) Jan 8, 2019 8:14 AM
Accountant vs. TurboTax (by Marv [IL]) Jan 9, 2019 5:51 AM
Accountant vs. TurboTax (by JB [OR]) Jan 9, 2019 8:00 AM
Accountant vs. TurboTax (by Busy [WI]) Jan 9, 2019 9:37 AM
Accountant vs. TurboTax (by Marv [IL]) Jan 10, 2019 5:46 AM
Accountant vs. TurboTax (by JB [OR]) Posted on: Jan 6, 2019 11:14 AM
For the past 20 years I've been using TT. Ever since my original accountant quit doing returns I decided to go with the software program. I have found the software fairly straightforward and useful. I also don't believe my preparer was giving me any added value for the extra expense.
My question is for anyone who has gone from one to another (preparer to software or vice versa) have you found that it was worthwhile? I know their advice throughout the year could be of definite value (if it were provided).
I'd love to get some others perspectives on this. Please chime in! --24.20.xxx.xxx
Accountant vs. TurboTax (by Richard [MI]) Posted on: Jan 6, 2019 11:51 AM
From experience, I think unless you have a complicated, entangling group of companies, partnerships, trusts etc you are probably better off using TT.
When it gets tangled you need an expert. Experts cost a lot. Be prepared to pay $1000-$5000 or more if you have moderate tangles. The more companies, partnerships, trusts you have and the more cash flow that's involved there is no upper limit.
When I was starting, I had an accountant that charged me several hundred a year. I dropped off my paperwork and went back a couple hours later to find his secretary doing my return on TT. The TT box was on the shelf right behind her. So I saw I was paying hundreds for a helper to just enter data. I fired that accountant and did my own until I needed advice. Simple Schedule E and Schedule C are pretty easy.
I believe that an accountant should be used for advice on how to arrange business tax wise and for advice on how to best minimize taxes. Make a deal on the data entry. --23.121.xx.xxx
Accountant vs. TurboTax (by Bill [NC]) Posted on: Jan 6, 2019 1:36 PM
TT. Been using it for years. --75.138.xxx.xxx
Accountant vs. TurboTax (by Larry [MN]) Posted on: Jan 6, 2019 3:03 PM
I had a an accountant for many years who charged very little (less than $300). I know people who pay 2 to 3 times that amount and more. He retired so last year I tried Turbo Tax. I was surprised how easy it was. Never going back. Plus I feel more in control of the process.
If you haven't used the software it asks you questions and walks you right through it all. --174.219.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 6, 2019 3:34 PM
TT and NOLO publisher books written by Stephen Fishman.
The first year I had rentals, husband didn’t trust TT enough, asked that I find a CPA. I did, and the CPA agreed with what I had told my husband the previous year; TT handled one of my husband’s stock transactions incorrectly, making us pay taxes on a transaction that shouldn’t have been taxed. (Reported, but not taxed.) CPA filed amended return. Why hadn’t I argued my husband into filing that previous return ‘ my way?’ Better to be happily married than ‘right ‘ and single *grin*
However, CPA was wanting to handle some rental items vastly differently than what I believed to be correct. I did get the accountant to handle the items ‘correctly’, everything I have read since confirmed I was correct.
So, I subscribe to the theorem that no one knows my tax situation like I do, and, unless it’s something extraordinary, I’m comfortable digging in and learning. Disclaimer- I once wanted to get a degree in accounting, took I, II, & Cost, before life happened. Also took a major tax preparer’s course, and worked one year for that chain doing taxes, back in the beginning of tax software. The class was taught pencil and paper, then when hired, a few days instruction on computers. Happened to be in an area with fairly complex returns, I kept running into issues with the software. My boss would call corporate, next day they would say ‘there’s an error in the software, we’re putting in a patch.’ Oi! Pencil and paper, I’d have had those clients done quickly.
Ever since that first year of rentals, and dealing with the CPA, husband has decided he really should just relax and trust me (lol!) so, I do the Schedule E pencil and paper, then we run everything through TT. There has been a couple of small issues where TT and I disagreed, so I delved into it. I feel confident I could defend my return if audited. Husband is very risk-adverse, never wants to be audited, so, while I won’t leave money on the table, I make darn sure I am on solid footing.
So, whether doing returns yourself, with TT, or with an accountant, my advice is ‘Trust, but Verify!’ --70.92.xxx.xxx
Accountant vs. TurboTax (by LindaJ [NY]) Posted on: Jan 6, 2019 4:06 PM
I had an accountant once. Back when it was done with pencil and paper. Then TT came along. Since I organize my receipts, decide where the expenses go and gather the income information for an accountant and they only have to enter it into their computer, I might as well do that as well.
Yes, an accountant can ask me questions if I have expenses for this or that, but I still have to figure them out. TT asks me the same questions and I figure them out. Why pay the accountant so much more than TT. It really is easy to use.
Unless I have some situation that is very complicated, I am going to stick with TT. --108.4.xxx.xx
Accountant vs. TurboTax (by Robert J [CA]) Posted on: Jan 6, 2019 4:19 PM
Believe it or not, the average accountant hasn't a clue to the "specialized tax codes" when it comes to professional landlords. And Turbo tax covers a lot of issues, but not all.
When my so called "friends" have to file their taxes after major real estate deals, I tried to explain the cost effectiveness of hiring a "knowledgeable" accountant. They are Penny Rich and Pound Foolish! One friend just learned that he's short on his past tax obligations, to the tune of $225,000 -- he didn't listen and refused to use anyone but his accountant. Another "friend" didn't listen and fixed up a new rental before putting the rental in service. His $52,000 remodel can not be deducted, it has to be added to the basis and written off at the time of sale, 20 years from now.
You get what you pay for. A real knowledgeable accountant will cost you a few hundred bucks for great advice. Well worth the price. --47.156.xx.xx
Accountant vs. TurboTax (by Barb [MO]) Posted on: Jan 6, 2019 4:28 PM
I’ve used an accountant. After spending way too much $$ I read all I could and use TT for business. I have an LLC that originally included my mother, so I have to do a 1065 and generate K1s. I could switch now to adding it to ours, but eventually we will probably add the kids as owners, and will need the K1s again, so no need to change.
The local CPA didn’t do any better than me when I did them in TT and compared them to her.
That said, I do my books in Excel, scan in everything, and read like crazy. My graduate degree is in mathematics, so it makes sense. Never took an accounting class, but it is just a form of math. --64.251.xxx.xxx
Accountant vs. TurboTax (by Beth [WI]) Posted on: Jan 6, 2019 4:36 PM
I found that by doing my own taxes I learned a lot that helped me later. Possibly a good CPA might have saved me some money but I would have paid the CPA.
One year I had a CPA review my filed tax return. She had been recommended to me by a landlord. She only had one suggestion for me; don’t have too much federal tax taken out (as we usually do) and put the money into a CD instead. Sounds reasonable. However, my husband likes getting a big tax refund. It also takes good discipline not to spend surplus funds. --47.12.xxx.xx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 6, 2019 5:16 PM
‘My husband likes...’ Yep, Beth, you are a wise woman. *grin*
(Also applies to ‘ My wife/ partner likes...’) --70.92.xxx.xxx
Accountant vs. TurboTax (by Ed [PA]) Posted on: Jan 6, 2019 6:13 PM
I bought houses cheap and did lots of rehab. In many instances rehab was spread over a number of years between tenants. For 25 years I paid an accountant. Best money I spent as he optimized depreciation schedules to minimize taxes. He closed the office 3 years ago and I tried TurboTax. I spent many extra hours trying to find the buried screens to fill them out the same as he did. Ended up filing amended returns 2 of those 3 years. Looking to get another accountant this year. --71.112.xxx.xxx
Accountant vs. TurboTax (by Robin [WI]) Posted on: Jan 6, 2019 7:25 PM
Last year we hired a CPA for the first time, one that came highly recommended by other RE investors. We got the final version in July, and I was less than impressed. As far as I could tell, all the CPA did was input the numbers provided. Didn't ask why two of the properties apparently paid no property taxes, didn't blink when one had no expense for insurance, didn't make the obvious suggestion to double up on charitable contributions so we'd be able to take advantage of the standard deduction.
I ended up re-doing our taxes on TT because I found a couple of areas where we could claim more deductions (she didn't depreciate our home offices, for example) and she charged $250 per revision. My numbers turned out the same as hers with TT.
I'll be doing our taxes myself this year. I'm looking for a tax ADVISOR instead of a tax PREPARER to help me with strategy. I don't see paying someone else 100+ an hour for what is essentially data entry. --204.210.xxx.xxx
Accountant vs. TurboTax (by Smokowna [MD]) Posted on: Jan 6, 2019 7:36 PM
Is it wise to say that when using TT you need to read some of the tax laws when faced with an example like Robert J sites?
In that....If you plan many improvements to a rental you may want to do them in stages after the rental is on-line rather than all before.
In this example it seems TT tax isn't wrong, however there is simply a better process available.
This is actually a question and not a statement.
Thanks all, --96.241.xx.xx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 6, 2019 11:50 PM
Smokowna, yes, there are huge advantages to getting a property ‘placed in service’ BEFORE doing repairs, if you can.
From Every Landlord’s Tax Deduction Guide, by Stephen Fishman, JD, “The cost of any repairs or improvements you make to the building before it’s offered for rent must be added to its basis.”
Accountant vs. TurboTax (by Marv [IL]) Posted on: Jan 7, 2019 5:12 AM
One of the advantages to using an accountant is he/she should know what the return should look like when it is done.
He/She should be up on new laws.
For instance if you have a profit on this years rental will you take the QBI deduction?
Accountant vs. TurboTax (by Steve [MA]) Posted on: Jan 7, 2019 6:10 AM
I find that if you use a true professional who knows the ins & outs of their field that 99.9% of the time it's worth it to use them. This applies equally to lawyers, accountants, plumbers, electricians, RE brokers, doctors, bankers, insurance agents, etc.
The person who handles our tax returns is up on the latest changes that might effect my RE interest, my contracting business and my personal affairs. We use Quick Books Pro to track all of out businesses as well as out personal stuff. When we meet with out accountant we have all of the pertinent info for each business printed out for him to keep. We normally spend 1 1/2 - 2 hours going over this info as well as our plans for the upcoming year. Throughout the year he's is readily available to answer any questions that we have. Each year for the last 10+ years he has at our request filed an extension for us. Last year his bill was $495.00 which I happily paid & added to our deductions. IMO the right tax adviser / accountant is well worth the money they are paid. More importantly my wife likes him, feels comfortable with him and trust him. Lastly as we all know a happy wife makes for a happy life.
Accountant vs. TurboTax (by S i d [MO]) Posted on: Jan 7, 2019 8:16 AM
I pay the $225 fee last year for a CPA to do our taxes: personal and rentals. I also get about an hour of time to pick his brain on new developments in taxes. He knows what documents I need to keep vs. which ones I can shred. Throughout the year if I have straight-forward tax questions, he'll answer at no charge.
The cost of TT plus e-filing State and Federal is about $70, I think. So really I'm only paying about $155.
There most likely comes a point (20+ units) where it becomes more efficient to have a pro do it, even if he has his secretary banging out the data. Back when I used to DIY tax with TT, I still had to install the new software, configure it, and navigate thru screens I only saw once per year. Probably took me 2-3 hours. He does the whole thing in less than an hour, then we chat.
Like when we discuss DIY repairs vs. hiring out, I think there comes a point where some folks are just more into it than others. --173.20.xxx.xxx
Accountant vs. TurboTax (by Wilma [PA]) Posted on: Jan 7, 2019 12:16 PM
I like what Busy(WI) had to say. I have become wiser about a lot of stuff concerning investing and taxes because I make myself understand the WHY behind what is being asked for by my tax program (H&R Block for me).
I have only once recently used a CPA, because he was also doing the accounting for my dad's finalized estate, and I was uncertain about how to account my half of the sale of Dad's house. I wasn't impressed - he took a deduction that we really didn't qualify for, and actually sat and completed the estate form in about 1/2 an hour as I sat in his office, answering the occasional question - and then kept the charge at $400, even though I'd done all of the organizing which enabled him to complete it quickly. And it turned out that even with my uncertainty, I was right about how to handle the sale of the house.
I'm also stubborn, and feel that if the above-average schmoe can't complete his/her tax form, then it's too complicated and needs reform. I may also channel my friend's uncle, who when audited, appeared in his bib overalls and work boots and said things like, "Well dang, how's a man supposed to understand that complicated stuff?", and "Shoot, I'm a farmer (he was). I know combines and milking machines. I can't afford to pay some CPA hundreds of dollars when I've got farm loans to pay!" (He got off with only having to pay the tax that he'd missed, along with a very small penalty.)
Accountant vs. TurboTax (by Marv [IL]) Posted on: Jan 7, 2019 2:31 PM
I'm still waiting from those with TT to answer if they are going to take the QBI deduction this year. --173.15.xx.xxx
Accountant vs. TurboTax (by Nicole [PA]) Posted on: Jan 7, 2019 3:18 PM
I pay rather than do my own but the fees I see above aren't here ... I pay about $1200. --72.70.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 7, 2019 3:24 PM
Marv, I’m still looking to see if I have a profit, lol! Haven’t kept up with my bookkeeping this last quarter. Haven’t finished the NOLO book. --70.92.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 7, 2019 3:26 PM
Marv, I’m still looking to see if I have a profit, lol! Haven’t kept up with my bookkeeping this last quarter. Haven’t finished the NOLO book. --70.92.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 7, 2019 3:27 PM
Oops, sorry about that. Hard to post properly with a dog helping. --70.92.xxx.xxx
Accountant vs. TurboTax (by razorback_tim [AR]) Posted on: Jan 7, 2019 4:36 PM
Two best decisions I have made in regards to accounting, taxes, and bookkeeping:
1. Hiring an accountant to do my taxes.
2. Getting my books set up properly in quickbooks and developing weekly, monthly, and annual routines to make getting everything ready for the accountant to prepare the taxes a breeze.
If I had not done these two things I would have likely exited this business years ago and definitely would not have grown past 10-12 units. --70.178.x.xx
Accountant vs. TurboTax (by Steve [MA]) Posted on: Jan 7, 2019 4:54 PM
In December of 2017, the Tax Cuts and Jobs Act further extended the benefits of investing in real estate by introducing a new “qualified business income” (QBI) deduction under IRC Section 199A that further reduces net rental real estate income by up to 20%.
The caveat, however, is that recent Treasury Regulations have clarified that not all direct real estate investing will actually qualify for the Section 199A deduction. Instead, investors must be able to demonstrate that they are operating a real estate “business” in order to qualify and show that either they personally, or other employees of the business, are spending a substantial amount of time actually engaged with the real estate (to differentiate a business from a mere real estate “investment” instead).
Furthermore, the QBI deduction for real estate investors may be further limited by the so-called “wage-and-depreciable property” test, which for high-income taxpayers (married couples filing joint returns with taxable income above $315,000, and taxable income above $157,500 for all other filers) typically partially or fully caps the maximum deduction at 2.5% of the original (i.e., “unadjusted”) basis of the property, plus 25% of the wages paid to employees in the business.
Nonetheless, the opportunity to deduct 20% of a real estate business’s net income provides substantial potential tax savings, making direct real estate investing even more appealing. Especially since, for those truly engaged in a real estate business with multiple properties, aggregation rules make it possible to group real estate investments together in a manner that at least eases the challenges of navigating the wage-and-depreciable-property test in the first place!
Accountant vs. TurboTax (by JB [OR]) Posted on: Jan 7, 2019 11:00 PM
Thanks to all for the detailed responses. Unless I start selling or adding some other business I guess I will continue to do it myself...unless Sid's guy moves out my way. Wow, what a deal. --24.20.xxx.xxx
Accountant vs. TurboTax (by Patti [MA]) Posted on: Jan 8, 2019 7:13 AM
Just going over all the forum for this subject and really got some insite. But what is the QB1 deduction? --24.218.xxx.xxx
Accountant vs. TurboTax (by JB [OR]) Posted on: Jan 8, 2019 8:05 AM
Patti, Steve (MA) just spelled it out for you very nicely two posts up from yours. --24.20.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 8, 2019 8:08 AM
A deduction created to aid the struggling tax preparer industry. With sophisticated software, many taxpayers can prepare themselves, lowering sales for cpa/accounting/tax preparer industry. Additionally, since any one who prepares your return for you is required by law to submit the prepared returns electronically, , the IRS may easily do computer audits on your return.
So, QB1 deduction is designed to send the masses scuttling to a cpa or other preparer.
Sounds like I don’t like tax preparers . Nope, I actually do. Much much better to have a properly trained preparer doing your return than screwing it up because this stuff just isn’t for you. I definitely get that. For me, my big hang up with landlording is heights. I don’t do heights. I could do all of the work that is up on the roof of my houses, except it’s up on the roof. I don’t by any houses taller than one story, cuz I’m at the edge of my comfort zone cleaning gutters on a one-story building. (Yep, that scared. And that’s not likely to change.) So, I absolutely get people making the right decisions for them. Some people would delve into the new tax laws, nerd out on it. For others, that is their equivalent to going up on a tall steep roof. I get that. --70.92.xxx.xxx
Accountant vs. TurboTax (by Patti [MA]) Posted on: Jan 8, 2019 8:14 AM
OIY Thanks should have double checked! --24.218.xxx.xxx
Accountant vs. TurboTax (by Marv [IL]) Posted on: Jan 9, 2019 5:51 AM
My point in bringing up the QBI deduction is this. You cannot always depend on your tax software to get the answer right. You need to know something about the law to make sure you have a correct tax return. A good accountant can provide this assurance that the tax is correct. --173.15.xx.xxx
Accountant vs. TurboTax (by JB [OR]) Posted on: Jan 9, 2019 8:00 AM
Thanks for bringing that point up Marv. It might be worthwhile to start a new post with that subject. --24.20.xxx.xxx
Accountant vs. TurboTax (by Busy [WI]) Posted on: Jan 9, 2019 9:37 AM
Marv, absolutely right. Tax software is only as good as the person entering the data, and even then, there can be issues. If someone was doing as my (wonderful) husband did, and merely entered the data, and ACCEPTED that the software did it right, one could be in big trouble. Or medium, even small trouble.
The error the software made resulted in us paying taxes of $600 on some stock transactions. I don’t remember the details, that was probably 2011 tax year. Anyway, I pointed that out to my (wonderful) husband, but he chose to say the software was right. I know when to pick my battles, $600 wasn’t worth it, in this instance, for me.
Next year, when I took the 2012 taxes to a CPA, he also spotted that, filed a revised return, my (wonderful) husband let me keep the $600 for my rentals, where that money is a big deal. However, I also had some issues with how the CPA handled a few rental items, so, for me, I chose to go back to researching, reading, doing the Schedule E pencil and paper, then we run it through tax software. Sometimes I have had to ‘fiddle’ with things in the tax software to make it perform the way I think it should be done, based on my research. Dear husband still does NO research, simply enters his stuff in, accepts it to be correct. I have told him that I won’t research for his stock trades, that he needs to read up. (Ok, I do give his stock trades very quick glance over...shhh, don’t tell him.);
My (wonderful) husband is a case in point of when it’s prudent to see a good accountant, or well-trained tax preparer. One needs to have an idea of which direction an item should go on a return, an understanding of what the IRS is trying to accomplish. --70.92.xxx.xxx
Accountant vs. TurboTax (by Marv [IL]) Posted on: Jan 10, 2019 5:46 AM
Well said. --173.15.xx.xxx