Landlords need an easy to use and affordable recordkeeping tool when managing rental property. Property management software like QuickBooks is expensive and overly complicated for the small landlord. Landlords need to spend a bit of time understanding how to set up accounts and then recording data into QuickBooks. An Excel spreadsheet, however, isn’t nearly powerful enough. Basic spreadsheets cannot easily generate the different reports landlords need. RentalIncomeExpense.com is the solution. It is free and easy income expense tracking for landlords.
Designed specifically for landlords, RentalIncomeExpense.com follows the same income and expense categories as those on Schedule E of Form 1040. So there is no setting up of accounts. Landlords simply record income and expenses as incurred and assign them to existing accounts. It’s Schedule E helper report makes tax time fast and easy for you and your accountant. In addition to the Schedule E helper report, RentalIncomeExpense.com provides landlords with a profit and loss report which helps them understand how well their rental property business is doing.
When a tenant vacates at the end of the lease, landlords have an opportunity to assess the state of the rental property. Normal wear and tear are items related to everyday living and are to be expected. Damage or negligent abuse by the tenant, however, is not normal and can be grounds for holding the security deposit. It is important for landlords to recognize the differences between normal wear and tear and damages.
Normal wear and tear include items such as minor holes, fading paint, and floor scratches. These items occur from everyday living. For example, small holes are present if the tenant hung photos on the walls. It is customary for landlords to clean the rental property for the next tenant. Cleaning includes filling minor holes in the wall, applying a fresh coat of paint, and even waxing floors.
Damage, on the other hand, are signs of intentional abuse or neglect by the tenant. For example, unusually large holes in the walls or unapproved wallpaper or painting are not normal wear and tear. Withholding some or all of the security deposit can be grounds in order for the landlord to cover the cost to repair damages.
Landlord recordkeeping is important to maintain. Whether the unit needs repairs due to normal wear and tear or damages, landlords incur cost and should record such expenses. RentalIncomeExpense.com is free landlord accounting software. With this free accounting tool, it is easy to record rental property income and expenses that align with Schedule E categories. Reports such as Profit and Loss and Schedule E Helper guide landlords as they manage their rental properties.
In the United States, the tax code has been widely seen as favorable for landlords. For instance, landlords can reduce their taxes by way of depreciation, and they can offset salary income with losses. In addition, they can shelter capital gains with a 1031 exchange. The Tax Cuts and Jobs Act of 2017 introduced a significant benefit of a 20% pass through tax deduction for landlords. This deduction enables landlords to deduct up to 20% of net rental income from income tax.
What is the 20% pass through tax deduction?
From 2018 through 2026, the 20% pass through tax deduction allows landlords to be taxed on 80% of rental net income. Specifically, this deduction is only for pass-through entities where landlords run their rental business as a sole proprietor, LLC, or S corporation. Overall, a pass-through entity is a common business type where individuals pay their profits on their individual taxpayer rates.
Maintain separate records to reflect the income and expenses for each rental real estate enterprise.
Perform 250 or more hours of rental services each year for each rental real estate enterprise. The safe harbor provides a list of rental services that qualify for this requirement.
Keep detailed records on the hours and descriptions of all services performed.
The amount landlords can deduct depends on income qualifications. For example, landlords can deduct the full 20% if taxable income is less than $157,500 as a single filer or $315,000 if married filing jointly. However, for higher income levels, a calculation will determine the deduction amount. In other words, tax software or accounting professionals will need to perform the calculation.
To qualify, keep good records!
Well organized landlords track rental income and expenses, and good data helps landlords understand how well the rental business is doing. In conclusion, the 20% pass through tax deduction for landlords and the safe harbor provisions to qualify reinforce the importance of good recordkeeping. There are online tools that help track rental income and expenses. One of them, RentalIncomeExpense.com, is even free!
Well, we’re approaching that time of year again. Prepping income tax returns is an annual event most people do not get excited about but must be done. As we make new resolutions at the beginning of every year, hopefully one of yours is to use landlord software to make tax time easier.
Landlord Software Tracks Rental Income and Expenses
Landlord software to track rental income and expenses makes life really easy. It can generate reports that tell you how well your rental property business is doing. For example, a profit and loss statement is a financial review of the business’ revenues and expenses over a period of time.
You have a lot of choice. For tax time, there are some excellent and free landlord income and expense tracking software such as RentalIncomeExpense.com. With RentalIncomeExpense.com, you can generate a Schedule E Helper report that mimics the Schedule E you will have to file with your taxes. Schedule E is one of the many schedules that are part of the IRS Form 1040. Taxpayers use Schedule E to report income and expenses from supplemental income. Landlords need to file Schedule E with their form 1040 to report income (or loss) from rental property.
The information and speed you will achieve with landlord software will make tax time less of a chore!
Every business needs customers to generate revenue. For landlords, those customers are tenants. So when a tenant vacates, it is critical for the landlord to fill the empty unit as quickly as possible. The longer the rental property is empty, the longer the landlord does not make any money. Here are some tips on how landlords can advertise rental property:
1. Decide Where to Advertise
Landlords should think about where most of their tenants will search for an available property to rent. Online advertising is one of the most popular and wide-reaching methods today.
Landlords can advertise listings with a real estate specific site such as Zillow or Apartments.com. Other online options include social media platforms like Facebook or Nextdoor or a more general site such as the ever popular Craigslist. Many of these online advertising options are free, which is a real plus for the landlord’s bottom line.
A simple yard sign can still catch the eyes of a promising tenant. The cost for the “For Rent” sign in your yard is minimal.
2. Post High Quality Pictures
For tenants who prefer to search online, pictures become a critical basis for decision making. Landlords should post high quality photos of the empty unit so tenants searching online have a good idea of the rental property and can make a decision from the photos alone. With today’s smartphones, landlords can take their own high quality photos instead of hiring a professional photographer. Once a tenant is serious about renting a particular property, they benefit from a physical walk through of the rental property.
3. Be Responsive to Inquiries
In describing your rental property, identify key selling points. For example, you will want to mention if you accept online rent payment, as that may be an important criteria for tenants. While the description of your property for rent should be thorough, tenants may have questions. Providing accurate contact information and responding promptly to inquiries makes your unit and your reputation as a landlord positive selling points. In terms of cost here, it will be your time again. Being a responsive landlord will help you meet your goal of filling your vacancy as quickly as possible.
Good Advertising will Fill an Empty Unit
Advertising your rental property online or on paper, showing your rental property with good pictures, and being responsive to inquiries are all steps in the right direction to filling your vacancy. The cost to advertise your rental property is reasonable, especially for some online listings. For any costs you do incur to advertise your rental property, be sure to track them with a good tool such as RentalIncomeExpense.com, which is free, follows the Schedule E income and expense categories, and enables you to generate reports.
Owning and managing rental property is a business activity. Landlording can be a full or part time gig. Whether you create a separate business for it or not, landlord record keeping for rental property is important for tax purposes. The two main types of records are the income and expenses and the supporting documentation of the income and expenses.
Income & Expense Records
Landlord record keeping for rental property makes it easier to complete tax forms, such as Form 1040 Schedule E. The tax forms determine if you made a profit or had a loss for that year from your rental property. Schedule E organizes activity by each property, so you’ll want to keep income and expense records for each rental address.
Supporting Documentation for Landlord Record Keeping for Rental Property
Proof of income and expenses is especially important if you are audited. Receipts and cancelled checks prove the income earned and expenses incurred in case the IRS has questions. Supporting documents leave a paper trail and prove that your claims are correct. They also show the tax deductions you receive are legitimate.
Landlords with good recordkeeping habits will maximize the tax benefits of owning and managing rental property. Keeping track of income and expenses and maintaining supporting documentation will reduce the stress if audited and provide peace of mind. RentalIncomeExpense.com is a free and complete solution for landlords. Try it today!
January is a new year with new promise. Unfortunately, landlords are still looking at the prior year as tax season nears. Wouldn’t it be great to have an easy to use and simple tool to expedite your rental income and expense tracking? Fortunately, www.RentalIncomeExpense.com is just such a tool. Best of all, it is a FREE service!
Do Not Do Income and Expense Tracking With a Spreadsheet
Spreadsheets make sense for calculations that you need to quickly do that are beyond a calculator. However, if you are using a spreadsheet constantly, you are probably not using the most efficient tool. This is certainly the case when tracking rental income and expenses.
Do you need to quickly create a profit and loss statement from your rental income and expenses? How about an IRS report for Schedule E? Or need to save keystrokes by reentering a common recurring expense? RentalIncomeExpense.com lets you do these things effortlessly.
RentalIncomeExpense.com is a Breeze
Get started by visiting www.RentalIncomeExpense.com. Change the way you do rental income and expense tracking! Signing up only takes a minute and the service is free, so there is nothing to lose.
Zillow provides a worksheet for landlords to track rental income and expense. It is free to download, and that is pretty much the best part of the Zillow worksheet. There is a better alternative to the Zillow worksheet for income expense tracking. By the time landlords sink hours entering their rental property data into the Zillow worksheet, they realize its significant limitations:
Designed for one to five properties. If you start using the Zillow worksheet, you’ll quickly run out of room if you have more than five properties. Or, if you have a roommate situation and want to track rent payment by individual, well, you’re limited again. There is a better alternative to the Zillow worksheet for income expense tracking.
No reports. Want to know the profit and loss for your rental property? You can’t do that with the Zillow worksheet. The Zillow worksheet only totals the income and expenses for all properties and shows that number as a cell. There is no way to see profit and loss activity by month. Additionally, the Zillow worksheet categories do not align with the IRS 1040 Schedule E categories, which means this worksheet cannot easily generate a report for Schedule E.
RentalIncomeExpense.com is the Better Alternative to the Zillow Worksheet
A better alternative is RentalIncomeExpense.com. It is free. It allows landlords to enter income and expense detail that align with Schedule E categories. Reports such as Profit and Loss and Schedule E Helper guide landlords as they grow and prepare for tax time.
Rental income expense tracking is an essential task for every landlord. Tracking helps landlords determine the health of their business. It also makes tax time easier as the rental property income and expense data is necessary to fulfill IRS requirements. For example, landlords usually need to complete Schedule E of Form 1040 for income tax purposes.
Expensive property management software like Renttec Direct or Buildium is overkill for the small landlord because it generally costs more in time and money than it is worth. On the other hand, a simple Excel spreadsheet is not nearly powerful enough because it cannot easily generate the different reports landlords need.
Easy to use and understand rental income expense tracking for landlords is highly desirable. Qualities of a great tool for landlords also include easy to generate reports like a profit & loss statement and an affordable price tag. Free is almost always the best!
In the US, landlords are obligated to report rental income received from tenants. The IRS’ Schedule E of Form 1040 captures associated income and expenses for each rental property. Most people do not get excited when it comes to preparing taxes. The IRS and many software providers provide landlord rental income expense tips and tools to make the reporting process easier.
The IRS provides guidance for landlords on how they can correctly report income and realize as many deductions as possible. Most taxpayers try to minimize what they owe to the government. Landlords can deduct expenses such as mortgage interest, property tax, and depreciation, which can be hugely beneficial. It is always good practice to seek the professional advice of an accountant with any questions or concerns.
In addition to deducting expenses, other landlord rental income expense tips include easy and complete record keeping. Landlords can use a spreadsheet to record income and expenses, but there are better tools, especially those designed specifically for the small landlord. For example, RentalIncomeExpense.com is a free tool for landlords. With this software, you can easily record expenses and generate valuable reports at tax time.