I own a duplex - should I use TurboTax for my rental income taxes?

Does TurboTax handle depreciation calculations properly? That always confuses me with my rental. And what about home office deductions if you manage the property yourself?

Yes, TurboTax does handle depreciation calculations quite well. It will ask about when you placed the property in service, the value of the building (excluding land), and then calculate the appropriate depreciation. It even tracks this from year to year so you don't have to re-enter everything. Regarding home office deduction, TurboTax can handle this too, but be careful. To qualify for a home office deduction for managing your rental, you need to meet the "regular and exclusive use" test, meaning the space is used regularly and exclusively for your rental management. The IRS tends to scrutinize these claims, especially for small landlords with just one rental unit. The software will ask questions to determine if you qualify.

How does it work with splitting expenses between the two units? My duplex has shared utilities that I pay and then I bill the tenant separately for their portion.

I'm skeptical about these AI tax tools. How do you know it's finding legitimate deductions and not just being aggressive in a way that might trigger an audit? Does it explain why something is deductible?

For splitting expenses between units, it's super intuitive. You just upload your utility bills and indicate the percentage split or exact amounts for each unit. It handles all the math and allocations automatically, even for complex situations where some months might have different splits. As for audit risk, I totally understand the concern. What I appreciate is that it actually explains the tax code for each deduction and shows the specific IRS rule that applies. It's not just giving you mysterious deductions - it explains why something is deductible and the documentation you should keep. It's actually more conservative than my old accountant was on some things but found legitimate deductions he missed.

Wait, how does this actually work? The IRS phone lines are notoriously impossible to get through. Are they just calling for you or do they have some special access?

Sounds too good to be true. The IRS doesn't give special access to third parties. I bet they're just charging you to wait on hold, and you got lucky with timing. No way this works consistently.

They don't have special access to the IRS - they use technology to navigate the phone tree and wait on hold for you. Their system monitors the hold music and will call you when a human actually answers. So instead of you waiting on hold for hours, their system does it. They're definitely not just getting "lucky" with timing. I've used the service three times now, and each time they got me through when I had previously failed after multiple attempts. Their system works because they've mapped out the optimal times to call and which options in the phone tree work best for different types of questions.

Does FreeTaxUSA handle state taxes too? And is it easy to import previous year's info if you're switching from TurboTax?

FreeTaxUSA does handle state taxes, though unlike federal (which is free), there's a small fee for state filing - around $15 depending on your state. Way cheaper than TurboTax's $50+ for state filing. As for importing from TurboTax, unfortunately, you can't directly import the TurboTax file. You'll need to manually enter your information the first year. However, it's not as bad as it sounds since you can use your previous year's return as a guide. After that first year, FreeTaxUSA will remember your info and make future years much easier.

What deductions are people commonly missing with rental properties? I always worry I'm leaving money on the table even with TurboTax.