Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Those with rental properties: tax question
We tried to sell our condo between February and August of 2011, but couldn't, so we rented it out to tenants when we moved into our new house.
Typically, we do our own income taxes using Turbo Tax--have been using it successfully for years. Now that we have the rental property, I'm wondering if we need to spring for a professional to do them for us. I know Turbo Tax has a module that includes entering info for rental properties, and ours seems simple enough (income = monthly rent; expenses = mortgage, HOA fee, taxes, and landlord insurance).
But if you have rental property, what have you done about taxes? Do you do your taxes yourself with something like Turbo Tax, or do you go to a professional?
Re: Those with rental properties: tax question
My Valentine Bookends (2~13~13, 2~15~09)
Not a landlord but a CPA. I think if you are comfortable Turbo Tax for rental properties is an excellent tool to use. I highlighted mortgage above and wanted to clarify becuase it's a common misconception that you can deduct your mortgage payment (I always read on here that people "break even" or are "renting for a loss" by taking rent prices less mortgage payment). You can't deduct your whole mortgage cost. You get to deduct the mortgage interest for the time that it was a "rental property". You do depreciate the property which typically leads to a rental tax loss which is limited depending on your income.
Sorry you are landlords by default. Hopefully you get good tenants until the market recovers and you can sell if you want.
I do my own taxes with Turbo Tax. The program does a really great job of walking you through what needs to be entered.
If you're willing to spend the time, you can do a trial run online and enter all of your information. You don't have to pay until you actually file, at the very end.
For me, Turbo tax is so easy, fun (I'm weird), and well-worth saving several hundred dollars.
ETA - get some quotes for a pro job to decide if it's worth it to you. I was quoted well over $600 from all local CPAs I contacted.
We've always gone to professionals. For us, the peace of mind is worth the $200-$300 we pay.
We use a professional to prepare taxes, but we have numerous rental properties. Since you only own 1 rental property, you could more than likely handle taxes yourself. Agree w/pp who suggested getting estimate from professional and see it that works for you.
We own three rental properties, one in our home state and the other two out of state.
DH does our taxes himself, using Turbo Tax, every year and other than it being time-consuming it's not a problem. It helps that he keeps VERY detailed and meticulous records of every.last.penny related to the four homes (including our main residence) so he can run the necessary reports and find what he needs to input pretty quickly. It would take just as much time to gather the stuff and bring it to a professional, if not more given the need to organize, print or otherwise archive it, and transport everything rather than just look it up on our computer.
You can't use the regular version of TT, though...you have to spring for the Premier version.
Mr. Sammy Dog
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I firmly they believe they earn their money. I get more back than I would doing it myself and I have the additional support and backup should there ever be any issues with the IRS. Also, the most commonly audited returns are the ones done by oneself (rather than by a CPA).
For what it is worth, I have a rental property and I am a Realtor & property manager.
Hope that helps, best of luck!
Lighthouse State Beach, Santa Cruz.
The great thing about TT is that you don't pay until the end, so you can enter everything and then only submit & pay if you feel good about it. If, after entering everything, you don't feel confident, take it to a pro.
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Thinking of doing cosmetic updates to a dated home? These were our costs.