How much time do you spend prepping for taxes?
Rene HosmanPro Member
Rental Property Investor · Denver, CO · Member since 2024 · 583 posts · 653 votes28 votes total
How much time do you spend prepping for taxes?
Most Popular Reply
Investor · Fort Worth, TX · Member since 2016 · 11 posts · 6 votes
1yQuote from @Rene Hosman:
Everyone's "favorite" time of year is upon us.... I'm talking about tax season!
I’m curious about how much time you all spend prepping for tax season before your CPA (or tax preparer) officially files your returns?
I'm wondering what tools and resources you all use as rental owners and investors to get or keep your financial ducks in a row? Collecting rent statements, expense receipts, mortgage interest docs, and more—can sometimes feel like a full-time job in the weeks leading up to tax day. I'm really old fashioned and have been using spreadsheets for years. I know of other softwares, like Baselane that handle income and expenses all in one place. What is your take on these softwares that help with rent collection and expenses?
What softwares are you using? How long are you usually spending on prep before you hand it all off to your CPA? A few hours? A couple of days? Multiple weekends? Do you have a particular system or software that’s been a game-changer for you? Drop your experiences below! I’d love to hear how you’re tackling tax prep and if tools like Baselane—or any other solutions—have made a difference in lightening the load.
I've been using Baselane for over three years now and tax time is always easy. Everything is up-to-date in realtime so I could do my taxes any day of the week! Just download their tax package and you're done!
28 Replies
- 1yJoshua ThompsonBusiness MemberAccountant · Melissa, TX (Remote) · Member since 2017 · 210 posts · 135 votes
If it helps, I asked many clients this same thing and learned the clients who spend time each month updating books and records are the ones who spend less than 30 minutes preparing everything for us.
The ones using software are hit or miss if it takes less than 2 hours or DAYS! With software, it's only as powerful as its user so some clients overcomplicate things and spend most of their time trying to "fix Quickbooks".
The most successful and quick clients keep it simple or keep it to their comprehensive level.
Thompson Tax Group LLC550 Reviews - Investor · Fort Worth, TX · Member since 2016 · 11 posts · 6 votes1y
Quote from @Rene Hosman:
Everyone's "favorite" time of year is upon us.... I'm talking about tax season!
I’m curious about how much time you all spend prepping for tax season before your CPA (or tax preparer) officially files your returns?
I'm wondering what tools and resources you all use as rental owners and investors to get or keep your financial ducks in a row? Collecting rent statements, expense receipts, mortgage interest docs, and more—can sometimes feel like a full-time job in the weeks leading up to tax day. I'm really old fashioned and have been using spreadsheets for years. I know of other softwares, like Baselane that handle income and expenses all in one place. What is your take on these softwares that help with rent collection and expenses?
What softwares are you using? How long are you usually spending on prep before you hand it all off to your CPA? A few hours? A couple of days? Multiple weekends? Do you have a particular system or software that’s been a game-changer for you? Drop your experiences below! I’d love to hear how you’re tackling tax prep and if tools like Baselane—or any other solutions—have made a difference in lightening the load.
I've been using Baselane for over three years now and tax time is always easy. Everything is up-to-date in realtime so I could do my taxes any day of the week! Just download their tax package and you're done!
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
I don't use any software (other than filing my taxes). I keep track of expenses as they come in (I have a notebook) for each rental and file the invoices/bills/etc as soon as they come in and are paid. I keep everything for 1 tax year in a single file and paperwork for each property is kept together. Makes it much easier. I have my notebook next to the area where I keep the paperwork, so it is easier to keep track of things.
- 1yLinda WeygantPro MemberInvestor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
I've asked my clients a similar question and have developed tools for them to minimize this, but I find there are a few different types of clients.
Manager managed - these folks have no issues as they simply upload their year end statement from their property manager, their 1098 mortgage statement and any other one-off expenses they may have paid for outside of the management company. Easy peasy. Less than 10 minutes and they are done.
Self Managed, Low Volume - these folks collect the same rent every month, have minimal expenses beyond their mortgage and find it very easy to collect the few documents they have to report it. I have a template that I provide and they can either complete the template or just give me their documents and I'll complete the template before prepping the taxes.
Self Managed, High Volume, Very Organized - these folks keep up on their activity. They are actively managing their properties, do their own recordkeeping at least once per quarter if not more often and are ready to go with reports and back up very quickly at the end of the year. Total time spent throughout the year may be significant, depending on the number of properties and amount of activities, but year end is no more difficult than any other time period they're doing. These folks also tend to have all of their income and expenses going through a separate bank account so they just need to look in that one account to get everything organized.
Self Managed, High Volume, Not Organized at all - this is the type of people that stress out over tax season. They've neglected their recordkeeping all year long and now find tax time to be very stressful. When I encounter this type of client, I do everything I can to convert them into one of the previous clients.
First thing I have them do is run all their income and expenses through a separate account instead of their personal account. For those who are highly disorganized, I sometimes advise them to have a separate account for each property, depending on the scenario. I find that this helps them to really be able to focus (others, not so much).
Second thing I have them do is consider hiring me (or somebody else) to keep their books on a monthly or quarterly basis. This way, I can get the bank statements for the property and categorize and reconcile everything. I do this at least quarterly for some of my clients and they like being able to see the profit and loss reports. This also helps with tax planning so clients aren't blindsided.
The tools/software that clients use is as varied as the clients themselves. REIHub, Stessa, QuickBooks, spreadsheets, etc are all valid tools and depends on the client and how their brain works.
I wish you luck in getting yourself organized for the coming season, but would encourage you to make the recordkeeping an ongoing habit rather than a once per year stress fest.
- Rental Property Investor · Denver, CO · Member since 2024 · 583 posts · 653 votes1y
Quote from @Theresa Harris:
I don't use any software (other than filing my taxes). I keep track of expenses as they come in (I have a notebook) for each rental and file the invoices/bills/etc as soon as they come in and are paid. I keep everything for 1 tax year in a single file and paperwork for each property is kept together. Makes it much easier. I have my notebook next to the area where I keep the paperwork, so it is easier to keep track of things.
Wow and I thought I was old school!! How many properties are you able to manage expenses with your notebook method?
- Rental Property Investor · Denver, CO · Member since 2024 · 583 posts · 653 votes1y
Quote from @Linda Weygant:
I've asked my clients a similar question and have developed tools for them to minimize this, but I find there are a few different types of clients.
Manager managed - these folks have no issues as they simply upload their year end statement from their property manager, their 1098 mortgage statement and any other one-off expenses they may have paid for outside of the management company. Easy peasy. Less than 10 minutes and they are done.
Self Managed, Low Volume - these folks collect the same rent every month, have minimal expenses beyond their mortgage and find it very easy to collect the few documents they have to report it. I have a template that I provide and they can either complete the template or just give me their documents and I'll complete the template before prepping the taxes.
Self Managed, High Volume, Very Organized - these folks keep up on their activity. They are actively managing their properties, do their own recordkeeping at least once per quarter if not more often and are ready to go with reports and back up very quickly at the end of the year. Total time spent throughout the year may be significant, depending on the number of properties and amount of activities, but year end is no more difficult than any other time period they're doing. These folks also tend to have all of their income and expenses going through a separate bank account so they just need to look in that one account to get everything organized.
Self Managed, High Volume, Not Organized at all - this is the type of people that stress out over tax season. They've neglected their recordkeeping all year long and now find tax time to be very stressful. When I encounter this type of client, I do everything I can to convert them into one of the previous clients.
First thing I have them do is run all their income and expenses through a separate account instead of their personal account. For those who are highly disorganized, I sometimes advise them to have a separate account for each property, depending on the scenario. I find that this helps them to really be able to focus (others, not so much).
Second thing I have them do is consider hiring me (or somebody else) to keep their books on a monthly or quarterly basis. This way, I can get the bank statements for the property and categorize and reconcile everything. I do this at least quarterly for some of my clients and they like being able to see the profit and loss reports. This also helps with tax planning so clients aren't blindsided.
The tools/software that clients use is as varied as the clients themselves. REIHub, Stessa, QuickBooks, spreadsheets, etc are all valid tools and depends on the client and how their brain works.
I wish you luck in getting yourself organized for the coming season, but would encourage you to make the recordkeeping an ongoing habit rather than a once per year stress fest.
Thanks for sharing Linda this is great info! Happy to see another Arvada resident in the forums too :)
- 1yJake BakerBusiness MemberFlipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 695 votes
For those in the multiple-day category. At the bare minimum, you should do the following to make your bookkeeping easier:
Dedicate one checking account and credit card exclusively to real estate. Keep personal and business finances separate to create less headache.
File all receipts in a dedicated Google Drive folder. Digitize physical receipts for easy storage and use a consistent naming convention for easy sorting - 2024.03.25 Home Depot.
Maintain proper records, such as contracts, settlement statements, and promissory notes.
Additionally, you can track income and expenses consistently using software or spreadsheets.As you scale, if bookkeeping isn't fun, consider hiring a bookkeeper for a couple hundred bucks per month. This is often one of the first things a real estate investor will outsource.
BookkeepingRE - Bookkeeping for Real Estate & Service-Based Businesses58 Reviews - Specialist · Atlanta Metro Area, GA · Member since 2020 · 38 posts · 23 votes1y
Tax season can definitely feel overwhelming, but using the right tools can make all the difference. Baselane is one of those game-changers for real estate investors. It helps streamline the entire process by tracking income and expenses automatically, which means you don’t have to manually sift through receipts and spreadsheets. With Baselane, you can easily generate reports for tax time that are organized and ready to hand off to your CPA. It tracks rent payments, expense categories, mortgage interest, and more in one place.
I’ve found it really cuts down on prep time. Instead of spending multiple weekends organizing everything, you can just pull up the reports Baselane generates and have them ready for your CPA in just a couple of hours. It’s a huge time-saver and definitely takes some of the stress out of tax season. If you’re still using spreadsheets, it might be worth checking out—it’s like having a personal accounting assistant for your rental properties. Baselane For you
- Rental Property Investor · Wilmington, DE · Member since 2018 · 20 posts · 3 votes1y
My CPA just said they'll need to charge me for 8 hours of "accounting cleanup" just to get my Quickbooks ready to file taxes. Then they'll charge an additional $2,400 for filing tax returns.
Considering that I keep QB's reconciled up to date, shouldn't any "accounting cleanup" be included in the $2,400 fee to file tax returns?
I have 8 single family rentals in 2 single member/pass through entity LLC's. 2 states. I file jointly with my wife who's a w2 employee. My CPA also quoted $350 to send out only 6 1099's total in 2 LLC's. I've been with them for years. Please tell me if I'm overpaying.
- Specialist · Atlanta Metro Area, GA · Member since 2020 · 38 posts · 23 votes1y
@Justin Igoe why do you need a CPA to send out 1099's
- Member since 2024 · 20 posts · 8 votes1y
Quote from @Justin Igoe:
My CPA just said they'll need to charge me for 8 hours of "accounting cleanup" just to get my Quickbooks ready to file taxes. Then they'll charge an additional $2,400 for filing tax returns.
Considering that I keep QB's reconciled up to date, shouldn't any "accounting cleanup" be included in the $2,400 fee to file tax returns?
I have 8 single family rentals in 2 single member/pass through entity LLC's. 2 states. I file jointly with my wife who's a w2 employee. My CPA also quoted $350 to send out only 6 1099's total in 2 LLC's. I've been with them for years. Please tell me if I'm overpaying.
I was using Quickbooks, but it isn't setup for real estate when you first sign-up, and this made it kinda messy. That might be why you had these problems @Justin Igoe. You have to do some work to create real estate specific "Classes" and expense accounts for QB. The QB subscription that includes "Classes" is $85 and this is expensive when I started looking around.
I found Stessa and Digb to be the best options for organizing real estate portfolio and taxes, cheaper, and real estate focused. - Rental Property Investor · Wilmington, DE · Member since 2018 · 20 posts · 3 votes1y
Quote from @Sabrina Marie:
Quote from @Justin Igoe:
My CPA just said they'll need to charge me for 8 hours of "accounting cleanup" just to get my Quickbooks ready to file taxes. Then they'll charge an additional $2,400 for filing tax returns.
Considering that I keep QB's reconciled up to date, shouldn't any "accounting cleanup" be included in the $2,400 fee to file tax returns?
I have 8 single family rentals in 2 single member/pass through entity LLC's. 2 states. I file jointly with my wife who's a w2 employee. My CPA also quoted $350 to send out only 6 1099's total in 2 LLC's. I've been with them for years. Please tell me if I'm overpaying.
I was using Quickbooks, but it isn't setup for real estate when you first sign-up, and this made it kinda messy. That might be why you had these problems @Justin Igoe. You have to do some work to create real estate specific "Classes" and expense accounts for QB. The QB subscription that includes "Classes" is $85 and this is expensive when I started looking around.
I found Stessa and Digb to be the best options for organizing real estate portfolio and taxes, cheaper, and real estate focused.Thanks Sabrina but I actually already have Quickbooks Online set up with classes. I pay my CPA for QB's and get a small discount.
- 1yBonnie LowPro MemberLender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
Quote from @Joshua Thompson:
If it helps, I asked many clients this same thing and learned the clients who spend time each month updating books and records are the ones who spend less than 30 minutes preparing everything for us.
The ones using software are hit or miss if it takes less than 2 hours or DAYS! With software, it's only as powerful as its user so some clients overcomplicate things and spend most of their time trying to "fix Quickbooks".
The most successful and quick clients keep it simple or keep it to their comprehensive level.
I definitely agree with this statement. In my experience, you either put the hours in up front or at the end, but either way you (or someone on your team) has to do it. I think I've done my bookkeeping almost every way you can - from not at all -> keeping receipts in a shoebox and handing over the entire shoebox to my CPA -> running 10-key tapes on all the receipts for each category and handing those tapes to my CPA -> DIY Quickbooks -> paying a bookkeeper to manage everything in Quickbooks -> to now doing it myself using Baselane. My current solution of using Baselane is by far the most cost effective and easiest, but it still requires that I spend time bookkeeping. And you know what? I've come to believe that's not a bad thing. It forces me to get real familiar with my business and how my properties are performing. I keep saying it's making me a better investor and that's probably true. But what it's really doing is making me a better business person.
- Encinitas, CA · Member since 2011 · 191 posts · 252 votes1y
I use quicken and enter all categorized data the beginning of each month. For separate entities I use separate files for each entity. Each property within same entity I use a separate tag for. Come tax time it becomes fairly easy to run separate reports for each entity or each property for schedule E. After entry, save receipts and back up in a file for that year. Still use paper method for mileage logs.
Tried QuickBooks several years ago but it was more complicated and I did not need the bells and whistles. Stuck with Quicken. I think by waiting to last minute to put things together you miss items and year end tax planning becomes problematic. Helps a lot to be thinking about tax categories as you enter data.
- Rental Property Investor · Denver, CO · Member since 2024 · 583 posts · 653 votes1y
Quote from @Justin Igoe:
My CPA just said they'll need to charge me for 8 hours of "accounting cleanup" just to get my Quickbooks ready to file taxes. Then they'll charge an additional $2,400 for filing tax returns.
Considering that I keep QB's reconciled up to date, shouldn't any "accounting cleanup" be included in the $2,400 fee to file tax returns?
I have 8 single family rentals in 2 single member/pass through entity LLC's. 2 states. I file jointly with my wife who's a w2 employee. My CPA also quoted $350 to send out only 6 1099's total in 2 LLC's. I've been with them for years. Please tell me if I'm overpaying.
That's a great question Justin, that's more than I pay but I can't tell you if that's overpaying because everyones taxes are so varied. I would maybe recommend reaching out to another CPA or two to get an idea of the cost in your area and with your situation to see if you're overpaying. I recommend starting your search here to find other reputable tax pros to compare to https://www.biggerpockets.com/business/finder/tax-and-financ...
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
I am done by the end of the first week of the following year because I have a bookkeeper. They work every Thursday afternoon & Friday morning. I just wait official documents from other sources; lenders, brokerages, etc. I issue my 1099s early, usually by EOM January of the next year.
We organize the books every Thursday afternoon. And organize next year tax accounts every friday. If we owe Billy a 1099 from a 1-off job done on January 7th, we have it on a January 10th tab to issue 1099 in 2026.
You fail to the systems in place, keep strong standards and the failure rate is light.
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Quote from @Rene Hosman:
Quote from @Theresa Harris:
I don't use any software (other than filing my taxes). I keep track of expenses as they come in (I have a notebook) for each rental and file the invoices/bills/etc as soon as they come in and are paid. I keep everything for 1 tax year in a single file and paperwork for each property is kept together. Makes it much easier. I have my notebook next to the area where I keep the paperwork, so it is easier to keep track of things.
Wow and I thought I was old school!! How many properties are you able to manage expenses with your notebook method?
5. It works for me.
- Member since 2020 · 239 posts · 104 votes1y
My CPA provides his clients with a spreadsheet that includes tabs, detailed instructions, and videos on how to use it. It's a fantastic tool for bookkeeping. I use it throughout the year, so when December comes around, I only need to spend a little time gathering all my documents. Depending on the number of properties you manage and the frequency of your expenses, it's important to update it at least every two months. Personally, I like to update it weekly—it helps me stay on top of things and, honestly, I find it fun!
- 1yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Justin Igoe I have hired a bookkeeper for the first time in 2024. We initially spent about 20 hours getting my accounts set up and organized in Quickbooks. This included all the data from the first 6 months of the year as I did not hire her until July.
I’ve got her dealing with 8 properties which have individual accounts. As well as 3 credit cards which so far have not cooperated and synced with Quickbooks which takes some extra time each month.
I have a biweekly zoom with the bookkeeper that usually takes about 20 minutes.
I have already received my preliminary documents from her for my accountant. I expect to finalize them by the end of January.
She is also sending out my necessary 1099s. She currently spends 5-6 hours a month on my stuff. This has been well worth it compared to the 40+ hours I was previously spending doing this myself come tax prep time. It was at the suggestion of my accountant that I hired the bookkeeper. Having the books properly set up for the first time ever will help me get all the deductions I’m entitled to. This will save me much more money eventually than the cost of the bookkeeper.
- 1yAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I usually spend about 10-12 hours on my taxes, if I had to take a guess. This is for 3 properties I use spreadsheets, that I also provide to my clients if they don’t have a good accounting system.
it can be a lot of work with making sure you have all the receipts, issuing 1099s, ensuring you have deductions, etc. as such, I recommend doing bookkeeping monthly.what’s funny is that as a tax preparer and advisor, the majority of the time isn’t spent entering numbers on a return. It’s typically all of the work to get numbers to enter on the return!
Brick House CPAs53 Reviews - Rental Property Investor · Wilmington, DE · Member since 2018 · 20 posts · 3 votes1y
Quote from @Rene Hosman:
Quote from @Justin Igoe:
My CPA just said they'll need to charge me for 8 hours of "accounting cleanup" just to get my Quickbooks ready to file taxes. Then they'll charge an additional $2,400 for filing tax returns.
Considering that I keep QB's reconciled up to date, shouldn't any "accounting cleanup" be included in the $2,400 fee to file tax returns?
I have 8 single family rentals in 2 single member/pass through entity LLC's. 2 states. I file jointly with my wife who's a w2 employee. My CPA also quoted $350 to send out only 6 1099's total in 2 LLC's. I've been with them for years. Please tell me if I'm overpaying.
That's a great question Justin, that's more than I pay but I can't tell you if that's overpaying because everyones taxes are so varied. I would maybe recommend reaching out to another CPA or two to get an idea of the cost in your area and with your situation to see if you're overpaying. I recommend starting your search here to find other reputable tax pros to compare to https://www.biggerpockets.com/business/finder/tax-and-financ...
Thanks Rene. I will do that.
- Rental Property Investor · Wilmington, DE · Member since 2018 · 20 posts · 3 votes1y
Quote from @Brandi K.:
@Justin Igoe
youcan file your own 1099's for around $5.00 each on Yearli it takes less than 5 minutes each.
I think I'll just do the 1099's myself. Thanks.
- Rental Property Investor · Wilmington, DE · Member since 2018 · 20 posts · 3 votes1y
Quote from @Alecia Loveless:
@Justin Igoe I have hired a bookkeeper for the first time in 2024. We initially spent about 20 hours getting my accounts set up and organized in Quickbooks. This included all the data from the first 6 months of the year as I did not hire her until July.
I’ve got her dealing with 8 properties which have individual accounts. As well as 3 credit cards which so far have not cooperated and synced with Quickbooks which takes some extra time each month.
I have a biweekly zoom with the bookkeeper that usually takes about 20 minutes.
I have already received my preliminary documents from her for my accountant. I expect to finalize them by the end of January.
She is also sending out my necessary 1099s. She currently spends 5-6 hours a month on my stuff. This has been well worth it compared to the 40+ hours I was previously spending doing this myself come tax prep time. It was at the suggestion of my accountant that I hired the bookkeeper. Having the books properly set up for the first time ever will help me get all the deductions I’m entitled to. This will save me much more money eventually than the cost of the bookkeeper.
Thanks Alecia. I've been doing my own bookkeeping on Quickbooks online and it doesn't take too long. My accountant said we can do a share screen if I like so I'll take him up on that to find out why 8 hours of bookkeeping cleanup is necessary and not included in his tax return filing price because I already have them reconciled correctly up to date and thought I can just hand off for tax return prep.
- Rental Property Investor · Denver, CO · Member since 2024 · 583 posts · 653 votes1y
Quote from @Aaron Zimmerman:
I usually spend about 10-12 hours on my taxes, if I had to take a guess. This is for 3 properties I use spreadsheets, that I also provide to my clients if they don’t have a good accounting system.
it can be a lot of work with making sure you have all the receipts, issuing 1099s, ensuring you have deductions, etc. as such, I recommend doing bookkeeping monthly.what’s funny is that as a tax preparer and advisor, the majority of the time isn’t spent entering numbers on a return. It’s typically all of the work to get numbers to enter on the return!
I agree it's finding all your numbers that takes the most time!! I always start out strong in the new year.... Then Q3 & Q4 are a little less diligent about keeping track in the moment and I have to go investigate and dig for receipts come tax time, haha
- Accountant · 100% Remote · Member since 2019 · 495 posts · 216 votes1y
@Rene Hosman, QuickBooks Online for everything. It makes it super easy for us to produce all the financials our Clients need for their tax pros to file their tax returns. I will say using QBO properly takes experience so it's not the best software for an REI doing their own books who doesn't have any training. With training, it's great.
Time spent varies from Client to Client, but I'd bet they probably spend ~30min answering our questions and clarifying transactions to close out the year. Then, we do everything else. It helps that we don't allow transactions to pile up throughout the year.
Most of our Clients before having us do their books would have to extend every year and some even went multiple years without filing tax returns. For the ones who did get everything together themselves to file came to us shortly after talking about how horrible of an experience it was and how they would never do it themselves again (lots of wasted time that took them away from making money).
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