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Archives for Tax Reporting

What To Do If You Have Not Reported Your Real Estate Investments On Last Year’s Tax Return

Here at Camuso CPA, we offer a wide array of tax services for real estate investors including tax preparation and tax planning. If you are interested in how this might specifically benefit your business or portfolio, please don’t hesitate to reach out in detail today to schedule a free initial consultation regarding your specific facts and circumstances.

The IRS can go back up to three years to prosecute cases of tax evasion, and in cases where they find substantial error, they can decide to go back up to six years or more. If you did not report your real estate transactions properly in prior years the best course of action is to file an amended tax return.

Step 1: Calculate Your Tax Liability

When preparing your tax return, you are going to have to figure out your taxable income from your real estate investments for the year. This involves figuring out how much of your assets were sold for capital gains. Additionally, if you own rental properties you will have to determine the amount of taxable income to report from your portfolio.

If doing real estate tax is proving to be a challenging feat, you should consider enlisting the services of a qualified CPA at a professional tax firm such as Camuso CPA.

Step 2: Amend your return

Once you have determined your capital gains and tax liabilities, you should download a current IRS Form 1040X, Amended U.S. Individual Income Tax Return

Step 3: Mail in your amended return

After preparing your amended tax return to reflect your real estate transactions they will be mailed to the IRS along with all applicable tax payments.

While paying taxes can at times be painful, it is very important that you include your real estate businesses and portfolio properly on your tax return. Ultimately, if you choose not to file your gains/losses and/or income, you will be committing blatant tax fraud to which the IRS can enforce a number of penalties, including criminal prosecution, five years in prison, along with a fine of up to $250,000.

Here at Camuso CPA, we do have the ability to offer tax preparation and planning services to our real estate clients. If you are interested into how this might benefit your business or portfolio, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answers any questions you have.

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How To Calculate Depreciation On Rental Portfolios

Here at Camuso CPA, we offer a wide array of tax services for real estate investors including tax preparation and tax planning. If you are interested in how this might specifically benefit your business or portfolio, please don’t hesitate to reach out in detail today to schedule a free initial consultation regarding your specific facts and circumstances.

How To Calculate Depreciation On Rental Portfolios

If you own a rental property and want to take advantage of the tax breaks one of the most useful tax tools at your disposal is depreciation. Rental property depreciation allows investors to write off the structure and improvements to the property over a period of time. This is non-cash expense that you can use as a write-off on your taxes. Depreciation is one of the biggest benefits to real estate investing because it can reduce reportable net income and therefore, your taxes

Depreciation is the loss in value to a building over time due to age, wear and tear, and deterioration. You can also include land improvements you’ve made and items inside the property that are not part of the building like appliance and carpeting. You can only depreciate the improvements to the structure itself – not the land.

Depreciation deductions are spread out over the useful life of a property. The IRS allows an owner to depreciate the value of the home over a 27.5 year period. The time periods of depreciation can be adjusted based on the components of the property which can offer even larger tax planning opportunities. We cover this in other articles here.

It is important for all real estate investors to deeply understand depreciation and how it applies to their portfolio. There are many tax planning opportunities available related to depreciation.

Here at Camuso CPA, we do have the ability to offer tax preparation and planning services to our real estate clients. If you are interested into how this might benefit your business or portfolio, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answers any questions you have.

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Items Required for Filing Income Tax Return

Below is a comprehensive list of the items that you will need to provide your CPA to file your income tax return. Best practice is to compile a file of these items throughout the year as applicable so they are available to send to your CPA as early as possible.

·         Basic Information

o   Full names, Social Security Numbers, Birthdays, and Addresses of self and all family members

o   Filing status election (Consult CPA)

·         Financial Information

o   All W-2s’s

o   All K-1’s

o   All 1099’s

o   Alimony

o   Business Income documentations

o   Rental Property Income documentation

o   Documentation for all income not included elsewhere

o   State tax refunds

o   IRA Contributions/Withdrawals

o   Mortgage Interest

o   Real Estate Taxes Paid

o   Any other taxes paid

o   All charitable contributions documentation

o   Medical expenses documentation

 

Be sure to consult your CPA about any expenses which you are not clear on in terms of qualification for deductions or exemptions. We are the Charlotte CPA to call for help with income taxes. Feel free to reach out to us at your convenience!

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