That's a good point I hadn't considered. How would I know which parts of the fees might need to be capitalized? The HOA sends financial statements but they don't break down exactly how every dollar is spent.

You should request the detailed financial statements from your HOA, which they're usually required to provide to owners. Look for line items labeled as "reserves," "capital improvements," or "replacement funds." These are the portions that might need to be capitalized. If your HOA isn't transparent about this, you could reasonably estimate based on your monthly statements and any announcements about major projects. For example, if they announced a $100,000 roof replacement and there are 50 units, you might allocate $2,000 of your annual fees toward a capital expense that would be depreciated over the roof's useful life (typically 27.5 years for residential rental property) rather than deducted immediately.

In TurboTax, when you get to the rental property section, there's an "Expenses" category. Look for "Homeowner Association Dues" as a specific line item - that's where you can put both types of fees combined. If you want to separate them, you can use the "Other Expenses" category and create two separate line items.

Do they handle multi-state employees? I have people working remotely from different states now and it's becoming a nightmare with my current system.

Thanks for sharing your experience! It's reassuring to hear from someone using it long-term. Does it handle tip reporting well? That's something we need to manage for our groomers. OnPay does handle multi-state employees really well according to their website. My brother mentioned they actually specialize in that since they work with a lot of construction companies that cross state lines. You can apparently set up unlimited state tax accounts without extra fees.

Oh man, I feel this comment in my SOUL. Did the same thing with my first business and ended up with a similar mess. Tax agencies have zero sense of humor about payroll mistakes.

That's exactly what I'm trying to avoid! I've been doing contract-only up until now, but as we're growing I'm bringing on more permanent staff. Did you end up with a software solution you liked after your spreadsheet disaster?

Isn't the backdoor Roth thing a loophole that Congress keeps threatening to close? I was thinking about doing this but I'm worried they'll change the rules and I'll get stuck with taxes or penalties.

It's not technically a loophole - it's a completely legal strategy that's been explicitly acknowledged by the IRS. Congress has discussed limiting it in various tax proposals, but so far it remains unchanged in 2025. Even if they did change the rules going forward, it would be very unlikely to affect conversions you've already done. Typically tax changes aren't retroactive in that way. If you qualify for a backdoor Roth contribution based on your income, it's still a valid strategy to consider. Just make sure you understand the pro-rata rule if you have existing Traditional IRA balances.

Yeah but if your income is too high you can just do the backdoor Roth like someone mentioned above. I've been doing it for years since my income is above the limit. My accountant says its totally legit.

Do other tax filing services do this too? Or is this just a TurboTax thing? I'm trying to decide which service to use next year.

Most of the major tax filing services do something similar if you choose to pay your filing fees from your refund. H&R Block, TaxAct, and TaxSlayer all use a similar bank transfer system and charge an additional fee ($35-$45 range). The only way to avoid these fees completely is to pay for the tax software upfront when you file. Some completely free options like FreeTaxUSA charge much less for their premium versions ($15-$20), so even paying upfront is more affordable than those refund transfer fees. Credit Karma Tax (now called Cash App Taxes) is completely free for federal and state, but it doesn't offer the option to pay from your refund since there's no fee to begin with.

Yep, it's a pretty slick way for them to make extra $$. The worst part is they don't make it very clear during the filing process. It's usually buried in the fine print or shown as a "convenience fee" or "refund processing fee" in a way that doesn't really highlight what's happening.

That's great advice! We did replace all the windows with energy-efficient ones about 10 years ago, and the roof was replaced with better insulation. Would normal home maintenance like painting or fixing broken things count too? Or just improvements that increase the home's value?

You can only include capital improvements that add value to your home, prolong its useful life, or adapt it to new uses. The energy-efficient windows and better insulation definitely count! However, regular maintenance like painting, fixing leaks, or general repairs don't count since they just maintain the home's condition rather than improving it. Keep in mind that some projects have elements of both - for example, if you replaced a broken water heater with a standard new one, that's maintenance. But if you upgraded to a high-efficiency model that added value beyond just fixing what was broken, the difference in cost could be considered an improvement.

This is exactly what happened to me! I didn't report the sale at all because I knew I qualified for the exclusion. Then got a letter from the IRS saying I owed taxes on the full amount. Once I filed an amended return properly showing the sale and applying the exclusion, everything was resolved.

Omg I think that's exactly what happened. My mom used one of those tax software programs and I don't think she ever entered anything about the house sale because she assumed she wouldn't owe taxes on it. So the IRS probably just got the 1099-S reporting the sale proceeds with no corresponding explanation on her return. This makes so much sense now!