Tax season questions

7 Replies

Hello everyone! 

I would like to hear what other landlords keep track of during the year to make their lives easier during tax season. Also, what do you use to keep track of these things (QuickBooks, spreadsheets etc.). I am new and only own one duplex right now so I am open to suggestions. Thanks!

@Alyxandria Welch

I just use excel. One sheet per unit. You don’t really have that many entries for a rental for a whole year, especially when it’s rented... I categorize my expenses according to SchE so when it’s time to fill out my taxes, it’s mainly a copy/paste activity.

If you don’t like setting up and working in Excel, I believe other use QB because they are used to it even though it’s sort of overkill. I’ve seen Stessa, which is free, recommended just about every time here in BP. Apparently, I believe it’s designed for this...?

If you want to understand more how I handle this bookkeeping, I’d be happy to chat with you. Just send me a direct message.

Good luck.

Alyxandria,

I also recommend Stessa for tracking income and expenses. 

However, I recommend finding an accountant who specializes in real estate taxation to prepare your taxes. Tax returns are complicated. You should consider working with your CPA remotely to expand your options.

I would also recommend looking for a tax strategist who is willing to work with you throughout the year, not just when preparing your tax return. You want an accountant that can help you strategize and who is responsive when you want to know the tax consequences of the decisions you are making throughout the year.

Good luck and let me know if you have any questions.

Thank you both for the response. Bill, I just started working with a CPA yesterday who has all of the things you mentioned above. He seems great. I like to document everything on my own for peace of mind. Ill definitely check out Stessa! Thank you 

@Alyxandria Welch

To add onto @Bill Hampton 's post, if you use an accountant to prepare your tax returns, find out software systems they can use.  Since you are asking about doing the bookkeeping, you might was well do the bookkeeping in a software system that the accountant uses.  Otherwise, you'll be paying them to redo all your bookkeeping, in a way, so that they can prepare the return.

I've used an excel spreadsheet for more than 20 years. It's been far more than adequate, rental properties at most require only very elementary software. I've keyed my excel spreadsheet to correlate with tax line/form reporting so preparing taxes at year end is an absolute breeze (plug and play). I'll assume you don't do have any payroll issues.