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I've used H&R Block for the past 3 years. Their pricing is definitely confusing. Last year with just W2s and standard deduction I paid $219. This year I added a 1099-MISC and a HSA contribution and suddenly it jumped to $389. No real explanation for the huge increase. I think they have different pricing tiers based on which tax forms you need. But they're not transparent about it until you're already sitting there with all your documents. Definitely feels like a bait and switch sometimes.
Did you try negotiating at all? I'm wondering if there's any flexibility with their prices or if it's just take it or leave it once they tell you the final amount.
I actually did try to negotiate this year! When they told me the price jumped to $389, I mentioned I was considering trying a cheaper option like TaxSlayer. The manager came over and offered me a "returning customer discount" that brought it down to $329. So there is some flexibility, but you have to speak up. The other thing I've learned is that prices can vary between different H&R Block locations, even in the same city. The office in the wealthier part of town charges more than the one in the shopping center near me. Might be worth calling a few different locations for quotes.
Has anyone tried TurboTax? I have a pretty similar situation (W2, some investments, rental property) and I'm wondering if it's significantly cheaper than H&R Block for complex returns.
I used TurboTax this year for a somewhat complex return (W2, 1099-B with stock sales, rental property). Their premier version was about $119 plus $49 for state filing. BUT they charged me an extra $59 for the Schedule E for rental property and another $39 for "expert review" of my stock sales. So I ended up paying around $270 all in. Still cheaper than H&R Block quoted me ($499), but not as cheap as their advertisements suggest. Their interface is pretty good though, walks you through everything step by step. Just be aware of the add-on fees.
I'm a tax preparer and I just wanted to add that when listing your business activity description on Schedule C, be specific but concise. Instead of just "Photography," write "Photography Services" or "Professional Photography." This helps the IRS properly classify your business. Also, don't forget to fill out Part IV of Schedule C if you have any vehicle expenses! Many self-employed folks miss this part and it can raise red flags if you claim vehicle expenses without completing that section.
Thank you! That's super helpful about being specific with the description. Would "Professional Photography and Videography Services" be too long for that field? And for Part IV vehicle expenses - I've been tracking my mileage to photo shoots. Is there a minimum amount of business miles before it's worth claiming?
Professional Photography and Videography" Services is a perfect description -'it s clear and specific without being too long. The character limit gives you plenty of room for that.'There s no minimum threshold for claiming mileage expenses - if'you ve legitimately used your vehicle for business purposes, you can claim those miles. Even small amounts add up to deductions that save you money. Just make sure you have a mileage log with dates, destinations, purpose, and miles driven. The standard mileage rate for 2024 is 67 cents per mile, so those trips to photo shoots could add up to a significantdeduction.
Don't forget to claim the home office deduction if you're editing photos at home in a dedicated space! Schedule C Line 30 lets you put the simplified deduction ($5 per square foot, up to 300 square feet). Easiest $1,500 deduction ever if you qualify!
Don't forget that if you're close to the threshold between standard and itemized, there's a strategy called "bunching" that might help. Basically, you alternate years - in one year you bunch together as many deductible expenses as possible and itemize, then the next year you take the standard deduction. For example, if you normally donate $3,000/year to charity, you could instead donate $6,000 in 2024, nothing in 2025, $6,000 in 2026, etc. Same total donations over time, but you might save more on taxes by itemizing every other year.
Does this actually work? Seems like it might flag an audit if your deductions fluctuate wildly from year to year. Has anyone actually tried this strategy successfully?
Yes, this absolutely works and is a completely legitimate tax strategy. The IRS doesn't flag you for audit simply because your deduction method changes year to year - millions of taxpayers switch between standard and itemized deductions regularly based on their financial circumstances. Bunching deductions is a recognized tax planning strategy discussed by CPAs and financial advisors. It works particularly well for charitable contributions because you have control over the timing. Many charities are even familiar with this strategy and can help you set up your donations appropriately. Just make sure you keep proper documentation for the years you itemize.
Just double checking - when figuring out if you should itemize, you also need to consider your state taxes, right? Some states automatically give you a standard deduction equal to your federal deduction, but others let you itemize on state even if you take standard on federal. Might be worth checking?
This is an excellent point that gets overlooked! I live in California and we can itemize on our state return even if we take the standard deduction on federal. Saved me about $400 last year by doing standard federally and itemized on state. OP should definitely check their state's rules. It's not always an either/or situation between the two returns.
One thing nobody's mentioned yet - check your pay stub carefully to see if you signed up for any benefits or deductions that might be taking money out. At my summer camp job, they automatically enrolled us in an employee meal plan that took like $50 out of each check unless you specifically opted out. Took me three paychecks to figure that out! Also some places do uniform deductions, parking fees, or even savings plans. Not saying that's what happened to you, but it's worth checking all the line items on your stub.
I haven't seen my actual pay stub, just the direct deposit amount. How do I get a copy of the detailed stub?
Most companies either provide a paper pay stub with your check (if you get a physical check), or they have an online portal where you can view and download your pay information. Ask your manager or HR person how to access your pay stubs - they're required by law to provide this information to you. Some companies use payroll services like ADP, Paycom, or Gusto where you'd need to create an account to see your info. If they haven't told you about this, definitely ask! The stub will break down exactly where every dollar is going.
Make sure to double check your withholding allowances on your W-4 too! When I started my first job, I accidentally put "0" allowances which meant they withheld the maximum. Your best bet is to fill out a new W-4 and give it to your employer. Since your total income will be under the standard deduction, you can probably claim exemption from withholding for the rest of the summer.
Amina Bah
What tax software is everyone using for their Airbnb properties? I tried TurboTax last year and it was a nightmare trying to figure out where to enter everything.
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Oliver Becker
ā¢I switched to FreeTaxUSA after having similar problems with TurboTax. WAY better for rental properties and it handles Schedule E much more intuitively. Plus it's cheaper.
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CosmicCowboy
Im in the same boat as u! My cousin said i dont have to pay taxes on my cabin rentals if i reinvest all the profit back into the property... is that true?? ive made like 23,000 this year and spent maybe 15,000 on renovations and new furniture.
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Dmitry Smirnov
ā¢That's not accurate - reinvesting profits doesn't make the income tax-free. You still need to report all income from your rental. The renovations and furniture aren't fully deductible in the year you buy them either - they need to be depreciated over several years (typically 5-7 years for furniture and 27.5 years for home improvements). You can deduct normal operating expenses like cleaning, utilities, and supplies in full for the current year, but capital improvements have to be depreciated according to IRS schedules. You're still taxed on your net income even if you're using that money to improve the property.
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