Bookkeeping Tips to Help Investors Stay on Track During Tax Season

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You are trying to refinance and your bank is requesting all sorts of financial documents…and at the same time your CPA is also asking for more financial information so they can complete your tax returns. Does this sound familiar? As real estate investors we know this scenario all too well.  This is a time to dread if you know that you have not taken the time to sit down and review any of your financials recently. That’s when the stress hits you like a ton of bricks. You are completely behind on your accounting which means a huge mess on your hands. You are not a procrastinator but the reality is you have so much going on that there is just not enough time to organize your records. Receipts, bank and credit card statements, invoices, etc… the paper trail is long and there are simply not enough hours in the day. What is worse is you may not even be aware of where your investments financially stand.

The above scenario has happened to the majority of Americans so don’t be too hard on yourself. Even as a CPA, I am no exception to this, unfortunately. The main reason this happens is due to spotty bookkeeping. The 2 most common complaints I get as a CPA is:

1. Not enough time in the day to get it done or

2. No budget to hire a bookkeeper to take care of it.

Related: Do You Hate Paying High Taxes? Me Too. Here’s the REAL Problem…

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2 Pointers to Help You Limit The Time Needed to Get on Track

1. No Shoe-Box Method:

Some people find it easier to stuff all of their receipts in one place to reference later. Is that you? If you keep every single receipt from the year’s purchases in one box (or I’ve seen suitcases at times), this this is not the best idea. When it comes time to file your tax returns or get financial statements to your bank, you may be in big trouble. Nothing is organized and this is where stress starts to creep up. With technology making organization easier, the tech savvy investors can purchase software to track their activities. However, if you simply buy the software but it just sits on your book shelf un-opened, then that does not do you any good so make sure that you use your software.

2. Don’t Burn Money:

If you are not tracking your expenses then you do not have a clear view of your property’s performance, which can be crucial. We all lose items from time to time, so it makes sense that a receipt or 2 can easily go missing. A quick tip is to take a picture of your receipt as soon as you get it. Then each month, download it from your phone and file it away in a folder. This helps you to eliminate the needs to carry around those tiny pieces of paper. Also, most phone cameras use the date and time as file labels and that can be great in helping you to sort the receipts by date. If that doesn’t get you fired up then just think about all the deductions you are missing out on just from not being organized. Think of it as throwing money away simply because you do not want to take the time to track your expenses. Accurate bookkeeping is the life line to your real estate and can be a powerful tool if used correctly.

Related: Investors Beware: 8 Warning Signs You May be Overpaying Your Taxes

Benefits to Keeping Your Bookkeeping on Track and Accurate

Simply put, organization is everything. To lenders, buyers and other professional advisors, having accurate financials builds credibility. Think of it this way: You meet with your personal banker trying to renegotiate a loan for your property and pull out a shoe box of receipts. Imagine the look on their face. They are thinking: “Fat chance I am going to spend the time going through each receipt.” The chances of getting your loan renegotiated at that point may be slim to none.

If you have any investors looking to buy your properties, they may request to see your financial documents on the property to determine its profitability. Providing them with organized data can mean the difference between making and breaking the sale. Having accurate financial statements not only builds credibility, but also helps a potential buyer to quickly move ahead in the buying process.

To add to the benefit list, organized bookkeeping allows the investor to review the financials of the investment on a weekly or monthly basis. This helps to strategically determine how to control costs, if spending should be increased or decreased in one area, and identify leverage points within the investment.  This also allows time to plan for tax deductions which can mean an increase on your returns. If you carefully track all your expenses monthly, the chance of missing out on a tax deduction due to a misplaced receipt decreases significantly.

Finding the Time

Now that we know the benefits to having accurate bookkeeping, we can focus on finding the time to actually get it done. The best way to accomplish this is to work with your existing CPA or hire a new one to help you “set-up” an accounting system that will work for you. If you get your accounts set up to accurately reflect the most common and recurring income and expense items related to your properties then it will make monthly data entry a breeze. After the initial set up, you can work with your CPA to streamline and automate simple tasks so you don’t have to waste your valuable time. There are many options available for accounting software such as QuickBooks that can automate a significant portion of your bookkeeping. Once it is set up, you can do it yourself or hire someone affordable to help out such as a bookkeeper or an assistant.

So this year, instead of shoving your receipts under the rug, take some time out to tend to the financial health of your investment activities. You will be so thankful that you did this when its time to get a loan or to do your taxes!

About Author

Amanda Han

Amanda is a CPA specializing in tax strategies for real estate, self-directed investing, and individual tax planning with over 18 years’ experience. She is also a real estate investor of over 10 years with a focus on long-term hold residential and multi-family assets across multiple states. Formerly a tax advisor at the prestigious accounting firm Deloitte in the Lead Tax Group, focusing on tax strategies for the real estate industry and high net worth individuals, and at an international Fortune 500 Company in the high-tech industry in the Corporate Tax department, Amanda’s goal is to help investors with strategies designed to supercharge their wealth building. Amanda’s highly rated book Tax Strategies for the Savvy Real Estate Investor is amongst Amazon’s best seller list. A frequent contributor, speaker, and educator to some of the nation’s top investment and self-directed IRA companies, Amanda has been featured in prominent publications including Money Magazine,, and Amanda was a speaker at Talks at Google and is a 40 under 40 honoree by CPA Practice Advisor, showcased amongst the best and brightest talent in the accounting profession. Her firm Keystone CPA, Inc. was awarded a two-time winner of the Top CPA of Orange County Award by OC Metro Magazine. She is certified by the CA State Board of Accountancy and is a member of the prestigious American Institute of Certified Public Accountants (AICPA) with clients across the nation.


  1. Travis Fisher on

    Does anyone have advice Android/iPhone apps for expense tracking? It would be great to be able to file things away on the spot so that it doesn’t get lost in the shoebox. 🙂

  2. Great tips. For receipts, I’ve started using the Genius Scan app. It uses the phone’s camera to take a picture of the documents, then turns them into pdf files. If you pay the $3 for the app instead of the free version, you can upload directly to Google Drive. As soon as I get a receipt, I have it in the right folder.

  3. I have heard really good thing about this website,

    If you pay for all of your rental related expenses with a cash-back credit card (not always possible, but probably the majority of the time you can), and link the card to your mint account, it will categorize everything for you and create cool spreadsheets, etc. Mint will also automatically gather the balances from all of your various accounts (investment, bank, credit card, and any loans) and present you with an instantaneous net worth summary. Too many other features to list, but for a free site, it’s pretty robust and easy to use, as well as safe and secure.

  4. Happy to say I’m not a shoe box person.
    My stuff is usually in an overstuffed file folder. 🙂

    Sticking everything away is fine as long as you properly account for it in your system first.
    I personally haven’t liked quickbooks or any similar programs so I just use spreadsheets. Gets the job done and you can make it as simple or elaborate as you need/want.

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