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Monday, January 9, 2012

US Tax Software

In preparation for tax time, I have looked briefly at available tax software. Personally I struggle with spending a lot of money on accounting services to file a tax return, but of course if you are going down that path you will have no need for tax software. For those that plan to file their own taxes, and who have leveraged LLPs to hold properties, here are some thoughts.

Required support for forms: LLPs file a 1065 return, and put the details of rental income and expenses on an attached 8825 form. Depreciation is calculated on an attached 4562 form. The output of the LLP's 1065 return is a K1 slip for each of the partners. The partners then file 1040-NR individual returns and take the K1 slips as input. So...the full job includes 1065, 8825, and 4562 forms for the LLP; and 1040NR forms for the individuals.

To date I have not found any reasonable (e.g. say under $100) software that handles all of those requirements. Only professional tax filer software which is far too expensive.

Looking at it closer, the complexity is not terribly high, but to the extent that it exists it's mostly with the LLP. The individual 1040NRs can easily be done using downloaded manual 1040NR tax return forms. If I then remove the 1040NR form from the software "requirements list", then there are some solutions.

As in previous years I settled on H&R Block Home Business as a software package to do the LLP 1065 returns. I still find the user interface more difficult than it needs to be, and more difficult than say TurboTax for Canadian Individual Tax Returns. But for me it's better than filling out manual forms for the 1065s. It helps calculate and track depreciation for example. It can also be used for a few LLP returns with only one purchase.

If you want to pursue the H&R Block software, there are online coupons that can save some money. I found one for 20% off and paid about $65 USD. Here's another link that I saw last night. http://www.hrblock.com/tax-software/premium-business.html?otpPartnerID=7825&campaignId=af_mcm_7825_0001&AID=10986834&PID=5459327

If you have different/better suggestions, please attach them as comments for other readers. Thanks.


  1. I am new to this business but I will try Quicken Rental Property Manager since appears to be designed specifically for our purposes.

    1. I don't think that Quicken Rental Property Manager is aimed at completing tax returns. It looks more like something to track revenue and expenses, as well as other management related infomration about the property.

  2. I hope it is ok that I pose this question to you as we are struggling with this at the moment. We have a LP/LLC set up which issued us K-1's for 2011 on rental property. this past was the 1st year and we have a loss. I want to report this on our personal CRA returns and am struggling with why we would need to RE-report all the rental expenses, etc on a T776. The only other option seems to be a T5013 which would require us to register as a partnership in Canada (and do the same process as the K-1 in USA). very frustrated here and wondered how you reported your income, or if you had any rental income experience?
    Thanks so much -

  3. Sorry for the delay. I just saw your comment. Unfortunately, specific tax advice for your situation has to be beyond what I can provide.

  4. I am Canadian who owns several properties in the USA for rental purposes. I bought the properties under my name. Is there a tax software that can prepare the 1040NR? I do not want to use a CPA accountant.

    Thanks for your help!

  5. Hi. You can find a blank Fillable 2012 Form 1065 here.

    You can fill out the form, save it, fax it, and email it. Please feel free to use it.

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