Tax Prep for Rental Property Owners and Real Estate Investors
From your first Schedule E rental to a ten-door portfolio: depreciation, passive loss planning and sale strategy for Northern Virginia landlords
Keep more cash from every door.
Tax Wise Financial Services prepares taxes and plans for rental property owners in Manassas, Prince William County, Fairfax, Loudoun and the DC area, and for investors nationwide who own property here. Most of our landlord clients have a W-2 job and one to three long-term rentals, often a former primary residence they kept when they moved. For them the planning is about the passive loss rules: the $25,000 special allowance that phases out between $100,000 and $150,000 of income, how suspended losses carry forward and release on sale, and whether a cost segregation study with 100% bonus depreciation produces a loss you can actually use this year. For investors with larger portfolios or a spouse who works in real estate, we document real estate professional status (750 hours and more than half your working time) and material participation so losses offset W-2 and business income. We handle the sale side too: depreciation recapture at 25%, the Section 121 exclusion on a converted residence, 1031 exchange timing, and installment sales.
Proof You Can Trust.
Rental returns fail on depreciation and basis, so we rebuild both. Your Schedule E depreciation schedule is reconciled to closing statements and improvements, land is separated from building correctly, and prior-year errors are fixed with Form 3115 when needed. You receive a written plan showing the passive loss position for each property, which losses are usable this year, and the projected tax on sale under hold versus sell versus exchange. Our “commonly missed” review covers HOA dues, mortgage points, travel to the property, property manager fees, security deposits booked as income, and refinances that changed the 1098. [Insert anonymized case: e.g. “A Fairfax couple with two rentals and $185,000 of W-2 income released $X of suspended losses in the year they sold one property, cutting their tax by $Y.”] Premium packages include IRS and Virginia notice handling and audit protection. Transparent pricing and a 3-business-day response promise.
Wins This Year, Not Someday.
In the first 30 days we review every property’s depreciation schedule, run the cost segregation numbers using our online calculator and order a study when it pays for itself, confirm your passive loss position, and set quarterly estimates if rental income is creating a balance due. If you are planning to sell, we model the sale before you list so you know the recapture number and whether a 1031 exchange or a year-end timing change saves more. If you or your spouse can qualify for real estate professional status, we set up the hours log and documentation standard in month one, because it cannot be rebuilt in an audit.
Fast response times.
Our secure portal and smart organizer, built for landlords, ask for closing statements, 1098s, property manager annual statements, improvement receipts, and your prior-year depreciation schedule, then stop asking. Unlimited email support between filings covers the questions that come up mid-year: a new roof, a tenant turnover, a refinance, a decision to sell. Optional bookkeeping keeps multi-property Schedule E records clean. Virtual appointments are standard, and our Manassas office is open Saturdays during tax season. With 20% to start and the balance at delivery, you see our work before paying in full.
Frequently asked questions
Can I deduct rental losses against my W-2 income?
Up to $25,000 a year if you actively participate and your modified adjusted gross income is under $100,000, phasing out completely at $150,000. Above that, losses are suspended and carry forward until you have passive income or sell the property, unless you qualify as a real estate professional.
What is real estate professional status?
An IRS status requiring more than 750 hours a year in real property trades or businesses and more than half of your total working time. It lets rental losses offset non-passive income. It is hard to meet with a full-time W-2 job unless a spouse qualifies.
Is cost segregation worth it on a single rental?
Often yes on properties purchased for $400,000 or more, especially with 100% bonus depreciation available. The catch is whether you can use the loss this year given the passive loss rules. We run both numbers before recommending a study.
What happens to taxes when I sell a rental?
You pay capital gains on appreciation and 25% recapture on the depreciation you took or should have taken. Suspended passive losses release in full in the year of sale. A 1031 exchange defers all of it if you reinvest within the 45 and 180 day deadlines.
I converted my old home to a rental. Can I still exclude the gain?
Possibly. The Section 121 exclusion applies if you lived in the home two of the five years before sale, so there is roughly a three-year window after moving out. Depreciation taken during the rental period is still recaptured.
New clients save an extra $20k on average.
Clients who switch from TurboTax or other prep-only services save an extra $20,000 in additional tax savings per year. Partner with us today to see if we can do this for you.
