This is the first end of tax year for my STR business. I've done my own taxes for years, but this will be my first time with an LLC & small business.
Any advice regarding taxes or accounting?
How many units?
I have 6 units in NYC and dont have any legal structure set up and so am trying to figure out how to minimize my taxes given all my expenses to get them set up.
I'll keep you posted im talking to a CPA today if you're interested. thanks, N
Are the LLC and small business related to the STR Business?
The STR business can be a little tricky for tax purposes. Depending on factors such as the services you provide and the average length of stay can dictate whether the income is treated as rental income or ordinary business income.
For Accounting - You should maintain a separate bank than your personal bank account.
Do you plan to keep doing your taxes?
If you decide to focus on your real estate business while an accountant manages your taxes/accounting; you may want to have the accountant review your prior year return to see if everything was done properly.
There are many accountants here on BP who provide accounting/tax services for real estate professionals.
it appears that you are in the business of short-term rentals.
If the short-term rental is considered ordinary income - you may be able to benefit through creating an entity that is taxed as an S-corp.
Can you please share any tips on minimizing taxes that the CPA that you interview with offers?
I would be interested in hearing what he says.
So, here is my specific situation (I should have put this in my original post):
1 STR operating since Nov. 2017
1 LLC, which is operating the STR
Average length of stay is between 3-6 days
Everything is being run through the LLC's bank
- Should I do the taxes myself (I've been a turbotax user in the past)
- Should I hire an accountant?
- Do I need a CPA?
- What else should I be asking that I have not thought of yet?
@Stephen Stefanini If you're asking 'Do I need an accountant/CPA?', the answer is yes. I have to imagine that one of the main reasons you've gone down this road is to profit. So, you should bring on a team member who's expertise is in maximizing profit. It will be more than worth it in the long run.
@Linda Weygant maybe you can answer Stephen's last question, "What else should I be asking that I have not thought of yet?"
I am bringing back up this topic as I am curious about losses that can be carried toward W2.
Is there a way to buy a property under a business doing STR, and if it's running negative (after mortgage payment, taxes, etc), can the loss be passthrough into a W2 ?
I know rental is considered passive income so obviously no. But here, if the property is owned by the STR business, can the loss be passthrough'd since it's seen as an active income?
Thanks for your insight.