The Biggest Tax Mistake I See Real Estate Investors Make (and It’s Totally Avoidable)

[William Thompson]

Over the years, I’ve noticed something interesting working with investors:
The biggest tax mistakes usually don’t come from shady strategies or bad CPAs…

They come from poor recordkeeping and timing.
Here’s what I mean

A lot of investors don’t track which expenses are repairs (deduct now) and which are improvements (depreciate later).

They toss all the receipts into a box or an app and hope it sorts itself out in March.

Then when tax season hits, they realize half of those costs could’ve been handled differently — maybe deducted sooner or even structured better if they’d planned a few months ahead.

The IRS doesn’t just care what you spent… it cares how you report it.*
A few small habits — separate accounts, clean books, and talking to your CPA before year-end — can make a massive difference.

Taxes aren’t about loopholes or tricks.

They’re about getting organized early and using the rules the way they were written.

Curious — when do you usually meet with your CPA? Before year-end or only during tax season?

[Matthew Hamilton]

I always tell my clients the same thing: the best tax strategy isn't glamorous — it's timely, accurate recordkeeping. For most smaller investors, paying for a solid bookkeeper would generate a higher (and faster) ROI than hiring a tax strategist.

Both roles matter, but you can’t execute any meaningful or complex tax planning without clean books. If the underlying data is sloppy, every strategy downstream becomes unreliable. You really do have to learn to walk before you can run.

Year-end planning only works when the numbers are right in the first place. Clean books make everything else possible.