How do you prepare for Tax Season?

12 Replies

Hello, I just purchased my first duplex last month.  What is your practices for preparing for tax season?

Should I scan all receipts, keep in a folder on my desktop? or keep a binder of all receipts?
Is excel good a good thing to use to keep track on Income/Expenses, helpful to a tax advisor or accountant?

What have you found to be a simple/stress free way of keeping your business organized financially? 

Thank you for your time.

I upload digital copies of all documents to my cpas website throughout the year. When I get them all, they file my taxes. Easy peezy

Hi Shane,

I can speak from experience as I am a Tax Accountant that deals with a lot of Real Estate Clients. Each client is different and so is each accountant's preferences. 

Assuming you don't do bookkeeping in a program such as Quickbooks or Xero and only keep receipts to keep track of expenses I would highly recommend preparing an excel of all expenses. 


It could really save your accountant a lot of time which means a lower bill for your tax work. Of course the accountant should double check your numbers, but will save them a lot of time from doing tedious work.

Not sure if you are familiar with Dropbox or Google Doc's. Would recommend looking into using a cloud based storage folder simply because you can access these documents from any location, won't loose them if your computer goes down & if your CPA is tech savy you could invite them to the folder where they could access the files in that folder. 

There's a lot of cloud based solutions to keep organized and minimize work.

If you have any questions, I'd be glad to help. 

Hey Steve,

I am pretty handy with excel and making financial documents, I was not quite sure if that was adequate for a Tax Accountant, I also would be scanning all receipts into "monthly/Yearly" folders.  Also, should I separate every Property in a different excel sheet? or as far as every UNIT on a different excel sheet?

Originally posted by @Steve Bogue :

Hi Shane,

I can speak from experience as I am a Tax Accountant that deals with a lot of Real Estate Clients. Each client is different and so is each accountant's preferences. 

Assuming you don't do bookkeeping in a program such as Quickbooks or Xero and only keep receipts to keep track of expenses I would highly recommend preparing an excel of all expenses. 


It could really save your accountant a lot of time which means a lower bill for your tax work. Of course the accountant should double check your numbers, but will save them a lot of time from doing tedious work.

Not sure if you are familiar with Dropbox or Google Doc's. Would recommend looking into using a cloud based storage folder simply because you can access these documents from any location, won't loose them if your computer goes down & if your CPA is tech savy you could invite them to the folder where they could access the files in that folder. 

There's a lot of cloud based solutions to keep organized and minimize work.

If you have any questions, I'd be glad to help. 

Hi Shane, if you haven't already done so, I would suggest scheduling a meeting with your CPA.  I did this before we bought our first property, and he provided me with the Excel spreadsheet to use.  Because we did this in advance, I already had the ss in the format that he likes, since he's the one that provided it to us, and I just update it monthly.  

If you don't have a CPA yet, now is a good time to get one.  We used to do our own taxes, but knowing we'd be investing, I found someone in advance.  I ask him questions every so often so that I can be sure to have everything in order for next tax season.  I'm sure any accountant would be happy to meet with you for the same purpose if it means that you won't be the guy showing up with nothing but a stack of wrinkled receipts :)

As for the receipts, I have a binder that I tape all the receipts onto standard size paper (if the receipt isn't already standard size).  I don't know if that's the most efficient method, but to me, it's quicker than scanning and uploading, etc.  I'm interested to hear how others manage this as well.  Thanks for posting the question, and good luck on your journey!

Thanks Nancy,  I bought the property fully occupied and being run by a property manager, maybe they can suggest a good Cpa around here.

Originally posted by @Nancy DeSocio :

Hi Shane, if you haven't already done so, I would suggest scheduling a meeting with your CPA.  I did this before we bought our first property, and he provided me with the Excel spreadsheet to use.  Because we did this in advance, I already had the ss in the format that he likes, since he's the one that provided it to us, and I just update it monthly.  

If you don't have a CPA yet, now is a good time to get one.  We used to do our own taxes, but knowing we'd be investing, I found someone in advance.  I ask him questions every so often so that I can be sure to have everything in order for next tax season.  I'm sure any accountant would be happy to meet with you for the same purpose if it means that you won't be the guy showing up with nothing but a stack of wrinkled receipts :)

As for the receipts, I have a binder that I tape all the receipts onto standard size paper (if the receipt isn't already standard size).  I don't know if that's the most efficient method, but to me, it's quicker than scanning and uploading, etc.  I'm interested to hear how others manage this as well.  Thanks for posting the question, and good luck on your journey!

I start by stretching to get loose.  Then I email all my stuff to my CPA.  It kinda adds some protection also bc I claim that I'm a luddite and my tax guy did all the magic.

Hi Shane, 

I like the suggestion to find and talk with an accountant to see what method they prefer.  For me, I love Excel docs.  I dump all my rental receipts into a labeled box throughout the year.  Whenever I have time, I take the receipts and staple them onto sheets of paper, highlight the related costs, and write the value and what they are for on the sheet of paper (in case the receipt starts to fade or I forget what it's for).  Each sheet is numbered.  When it's tax time, I enter all these costs into an excel sheet with all the rental categories and include the page number beside each item in case I need to look them up.  I submit the finished excel doc to my accountant.  This makes my accounting bill very small.  However, it is a lot of work for me.  

If I didn't have this time, I'm apparently allowed to just dump this box full of receipts at my accountant's office.  She might hate me, but apparently everyone else does this each tax season.  They also sell tax folders at Staples with labels for each category in case you want to dump a folder full of categorized receipts at your accountant's office.

Good luck!

  • Keep updated financial statements
  • Keep your tax advisor in the loop about any significant life change (they all have tax implications)
  • Keep a running list of all of your questions for tax time, or better yet, schedule a meeting or two throughout the year

I ask my accountant to file and extension  :-)

It may not be fun reading but it is important you at least understand the basics. You might want to check out IRS pub 17 or IRS pub 334 - Tax Guide for Small Business

https://www.irs.gov/publications

I put together an Excel spreadsheet for each property and I use a numbering system to mark each receipt. The number on the receipt matches the number on my spreadsheet entry. My CPA loves it. I keep hard copies of the receipts but at the end of the year I just turn in the spreadsheets and a large vanilla folder that contains the receipts in case he wants to look at anything. I have a separate sheet and folder for each property. It's pretty easy to keep up with.

I used to do things just on paper but after we bought the second house I could see that I needed a better way to get organized.

@Shane Welch

You don't want to wait till the end of the year or even in April of the following year to organize your business income/expenses.

You should organize them on a regular basis whether it be weekly or monthly. Considering each property shouldn't have too much activity on a monthly basis - it shouldn't be too difficult.

In regards to keeping records of the documents - I would use a online storage database like Dropbox or Google Docs. If you have 1-2 properties - I would categorize the income/expenses using excel.

You may also want to consider interviewing CPA's now instead of in 2019 when you need to file your taxes. The reason is two fold.
1) You can get some year-end advice
2) The CPA will be busy next year and may not be able to take you on as a client at that time.