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Sunday, December 29, 2013

TurboTax Business - First Impressions


I have been using H&R Block Business (part of "Premium and Business" which includes two separate programs) to do the US Federal and Arizona State income tax returns for our partnerships (LLPs). It works, but is not user friendly. Each year I curse the experience and vow that "next year I am going with TurboTax". Yesterday the weather turned ugly so I was not inclined to venture out and decided that this would be "next year".

The first discoveries were that TurboTax Business is much more expensive and also requires a separate purchase of TurboTax Business State to handle the Arizona Submission. Grrr. Well, Amazon had it on sale for $119 instead of $149...plus $50 for the State package. OK, it's cold outside so let's try it. Oh wait, software downloads aren't allowed outside the US. Double Grrr. After tricking it with a US credit card and address I finally got TurboTax Business downloaded and installed.

While I haven't got the final monthly statement from NRP (management company) yet I have a pretty good idea of revenue and expenses so I tried a pro forma return for one of the LLPs. Here are my first impressions.

1) The user interface is far better. More like I would expect given experience with Canadian personal tax software.

2) TurboTax Business is also more "system friendly". The H&R Block program needs to run as Admin, and I could never figure out how to direct where the data files are stored so they couldn't be treated as data to be backed up from a data directory. TurboTax Business runs without requiring Admin authority and you can easily direct where the data files are stored.

3) Handling of the property asset is more sensible. You enter the property value and then indicate how much of that is the value of the land, rather than entering two different assets. Side note...this is required because land is not depreciated.

4) Even though I was starting from scratch with no information being carried over from last year, the return was done in about 30 minutes! I had my return from last year handy and accounting records were up to date so there was no think/research time needed, but still the short elapsed time speaks well of the interface.

5) But wait...where are forms 8804 and 8805...the forms required to document with holdings for foreign partners? Not there! A call to Turbotax Support confirmed it...not included. Grrr again!

Ok decision time. $200 versus about $80. Plus it doesn't do the withholding part of the job, meaning downloading PDFs and filling those forms out separately. That is workable but I do like having all the data in one place, and having one consolidated output file containing all parts of the tax submissions for future reference.

Let's see if the software can be returned.

Has anybody discovered a better solution? It would be great to find a single package that supports the 1065 Partnership return, the withholding forms...and the personal 1040NRs. Good luck!

Yeah, yeah...I know...get an accountant. I don't think so!

10 comments:

  1. Thank you for sharing your experience. I too am against spending almost $1000 for an accountant. I will be filing this my Arizona rental property taxes the first time. I started renting it from Feb 2013. I do not have any tax number from US government yet (I will be filing the first time). Can you suggest me how to go about it? I guess I have to fill 1040NR (US non-resident allen form)? Can somebody guide me here? Thank you in advance.

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    1. I encourage you to read back through the older posts on this blog. You will find all of the steps we took. Yes, you will need to file 1040NR return(s)...one for each individual involved as owners. If you have the property owned via an LLP like we do, then the LLP also needs to file a return and depending on the type of entity it could be a 1065.
      Individuals filing a 1040NR Ned an ITIN number which in our cases was requested via the first 1040NR. Entities such an LLP require an EIN and that can be requested by phone. You will find discussion on all this in older posts. Please feel free to provide any new findings as comments as you go through the process.

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  2. Thank you for your blog, very insightfull!
    I bought condos in Tucson under a LLP in 2013 and will do my tax for the first time.
    I understand from your experience that H&R block business is a good option for the US side. which software are you using for the Canadian side?
    Thanks a lot

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  3. Yes, I used H&R Block Business for the LLP (1065 and related forms) returns in the US. For the US individual partner returns I filled out the 1040NRs manually using fillable PDFs downloaded from the IRS.

    For Canada, we just file normal personal returns, and for that I use Turbotax Standard. Which reminds me...I have the US taxes all done and submitted, but better get on with the Canadian ones.

    You can find some other posts from about this time last year regarding how we recorded the US income on the Canadian forms.

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    Replies
    1. Hi
      Have you been able to find a US tax sw can do LLP and 1040NR?
      If not, would you say HR block business sw is still better than Turbo business (and cheaper)? I'm looking for the tax sw for our US rental property
      Thank you
      KYLE

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    2. Hi Kyle, because we are "foreigners" according to the IRS and therefore have to file 8804 and 8805 forms, I will only consider switching when TurboTax supports those forms. I don't recall whether I checked at the end of 2015 (probably did) but prior to that they did not support those forms. I would really like to hear of a solution that does, because I really dislike H&R Block's package. Until then, I will continue with it.

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    3. Thank you very much. I found that TaxAct Business sw package (1065,8804/8805/8813) and bundled with 1040 (does have 1040NR) could be purchased for $99.99.
      https://www.taxact.com/business-taxes/download/partnership-llc/?yr=15
      i am not experienced in this area to comment but it looks like a good option.
      THoughts please.
      Kyle

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  4. That does that does look interesting. I will look at it more closely at tax time. I did not see 1040NR. Did you mean to say that it does NOT have 1040NR? In any case, filling out the PDF for the individual 1040NRs is not a big deal. Thanks for the suggestion!

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    Replies
    1. It looks like TaxAct has the right forms, but it appears to be priced by return. I have several LLPs so it is price prohibitive. Too bad...otherwise I would try it.

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  5. It does include 1040NR in the 2015 version. You just search "taxact 1040NR".

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