need a tax man, any reason not to go to H&R block?

mfp4073 · #1 01/04/2008, 04:44 PM

This year I will be having someone else do my taxes. Have been a first time homeowner this last year and have made sizable investments in the property during that time, so I want make sure its all there. Plus, from what I know they will go back to the last year (when I closed on my house late in the year) and check to make sure I didnt miss anything. Any reason not to go with them?

InLimbo87 · #2 01/04/2008, 07:09 PM

H & R Block is a huge ripoff. They're basically a bunch of people trained on a similar program to turbotax (much cheaper than them btw). It sounds like your taxes are very simple and you already know what's deductible/not.

If you find them too complicated to handle with a simple program, you can always get them done at a legitimate CPA firm.

mfp4073 · #3 01/04/2008, 07:11 PM

how do I differentiate between a firm that does what I need and one that is REALLY expensive for specialty stuff. Kinda new to this. Or should I just try the turbo tax? I tried it last year and some of the stuff didnt make sense to me. Like I was under the impression I could deduct some of the closing costs, but never really found somewhere to put it. I ended up taking it back and doing the short form.....

InLimbo87 · #4 01/04/2008, 07:16 PM

Really the only thing that you can deduct out of closing costs is any real estate taxes that went with the purchase. It should've included a question for that somewhere in the Schedule A deductions section.

If you have any questions or are looking for a good CPA firm, feel free to PM me. I am in no way a tax professional just yet, but I have been working with a public accounting firm for about a year and am a senior level accounting student.

WingnutSr · #5 01/04/2008, 09:09 PM

I will agree with H&R being a rip off! They do not even know about, or how to do deductions for travel expense for work related travel.

jay24k · #6 01/04/2008, 11:37 PM

Well, what exactly did you invest in your home? Is this your primary home or did you flip it?

If it is a primary, then really the only thing you can deduct is the amount spent on points and taxes. Chances are your standard deduction might be more if you are married.

I would stay away from H&R block as well.

mfp4073 · #7 01/04/2008, 11:50 PM

yeah, bought down points. Not married...think it would cost me more in the long run in sanity if I was!

I paid no taxes last year or intrest because it was late in dec. This year I have put in a water treatment system ($2500), replaced the main breaker box, replaced the well and pump, and other stuff that would easily add to $5000.

ok, so staying away from the block!

InLimbo87 · #8 01/05/2008, 12:13 AM

All of those additions are in no way deductible for your tax return. Really all you will be able to deduct during 2007 (it sounds like) is any mortgage interest or real estate taxes/points you paid.

mfp4073 · #9 01/05/2008, 12:23 AM

huh, thought I had heard that somewhere. The closing was actually 2006, so none of that.

InLimbo87 · #10 01/05/2008, 12:35 AM

You can't deduct home improvements/repairs on your primary household. The only real deductions allowed on your home property are mortgage interest and real estate taxes.

Repairs and maintenance could be deducted against an income-generating rental property, but that's a whole nother animal.

jay24k · #11 01/05/2008, 12:42 AM

If the closing was in 2006, you can't deduct those this year. Any repairs cannot be deductible unless you are selling the house. All those things you did are out of your own pocket unfortunately. You can however deduct the interest if you do a home equity loan or line of credit. If you plan to sell the house, keep all those receipts and then you can deduct it off your short/long term capital gains.

InLimbo87 · #12 01/05/2008, 01:06 AM

Quote:

Originally posted by jay24k
If the closing was in 2006, you can't deduct those this year. Any repairs cannot be deductible unless you are selling the house. All those things you did are out of your own pocket unfortunately. You can however deduct the interest if you do a home equity loan or line of credit. If you plan to sell the house, keep all those receipts and then you can deduct it off your short/long term capital gains.

Generally, personal home sales will not result in a recognized capital gain. Here's a good publication for any interested in reading up on IRS jargon: http://www.irs.gov/pub/irs-pdf/p523.pdf .

Capital losses on personal homes are never allowed.

jay24k · #13 01/05/2008, 10:55 AM

Sorry, I meant if you were doing it purely as an investment. If you are doing this as your personal home, then you can't. After 2 years living there personally, you make up to 500,000 I believe before you have to pay taxes. It might be different now amount wise. So if you want to make easy money, fix it up and sell it in 2 years. Then move.

InLimbo87 · #14 01/05/2008, 11:45 AM

Quote:

Originally posted by jay24k
Sorry, I meant if you were doing it purely as an investment. If you are doing this as your personal home, then you can't. After 2 years living there personally, you make up to 500,000 I believe before you have to pay taxes. It might be different now amount wise. So if you want to make easy money, fix it up and sell it in 2 years. Then move.

Now thats the thinking I like

jay24k · #15 01/06/2008, 12:07 AM

I'll be going through this during this tax season. I sold a second house in July. I waited 1 day after a year to pay so my capital gains is only 5% of the profit which isn't bad at all.