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Landlord Tips

Landlord Accounting Software

Accounting Software
Landlords have a choice for tracking rental income and expenses.

Tracking income and expenses for rental property is a task most landlords do not enjoy. Without a doubt, record keeping can be time consuming and often mind-numbingly boring. However, maintaining good records makes tax time easier and provides peace of mind. Therefore, it is important to understand how the rental property business is doing, and good landlord accounting software makes this task easy.

There is a lot of choice among landlord accounting software. The primary differences relate to cost, ease of use, and features (like reports). With the aid of the chart below, we take a look at some common ways, from the simplest to the most complicated, for tracking rental property income and expenses.

Tracking MethodPros & Cons
Spreadsheet* Free
* Create your own with Google Docs or Microsoft Excel
* Download free rental income and expense worksheet
*Cannot easily generate reports
Free Accounting Software* Free
* Simple and intuitive
* Easily generate reports like a Schedule E Helper and Profit & Loss statement
* RentalIncomeExpense.com
Paid Accounting Software* Expensive
* Can be overkill for a small landlord
* Complex and challenging to understand
* QuickBooks, Buildium, RentecDirect
Landlord Services * Provides benefits in addition to record keeping such as online rent payments, tenant screening, credit reporting, and vacancy listings
* Many times income and expense tracking is included as a free feature
* ClearNow, Zillow Rental Manager

Final Thoughts

Landlords have choice, and they range from simple spreadsheets to free landlord accounting software to paid accounting software. Find a solutions, as the important task of tracking income and expenses becomes easier with software for landlords!

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Landlord Taxes

Schedule E for Rental Property

Schedule E
Landlords need to file a schedule E with their form 1040 every tax year to report income (or loss) from rental property.

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. In contrast to earned income, supplemental income is not received through employment. Examples of supplemental income include rentals, royalties, and income from S corporations and partnerships. Landlords need to file a schedule E with their form 1040 every tax year to report income (or loss) from rental property.

Income on Schedule E

Schedule E is organized into five parts. Part I is the section focusing on income or loss from rental income. In this section, the primary income to complete falls on line 3: “Rents Received”. On this line, landlords report the rental income received from tenants for each identified property.

Expenses on Schedule E

To complete schedule E, landlords need to classify expenses based on 15 categories provided by the IRS. These expense categories include advertising, cleaning and maintenance, and insurance, just to name a few. In contrast to the simplicity of the rent reporting line, for expenses, landlords need to select a category for each expense for each property.

Completing schedule E is reasonably straightforward. In fact, it becomes very easy to complete if landlords use accounting software to track rental income and expenses. One in particular, RentalIncomeExpense.com, provides a schedule E helper report that mimics the schedule E. At tax time, landlords can provide this report to accountants for easy tax preparation. Best of all, RentalIncomeExpense.com is free!

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Landlord Tips

Landlord Income Expense Tracking Reports

Income Expense Tracking Reports
Landlord income expense tracking reports are necessary to gauge the health of the rental property business.

Landlord income expense tracking is an important task. One benefit of tracking such information is that the data can be used to create helpful reports. When used correctly, reports gauge the health of the rental property business and to assist accountants at tax time.

Landlord Income Expense Tracking Report #1: P&L

The profit and loss statement is a report that summarizes revenues received and expenses incurred with managing rental property. It shows how well or poorly the business is doing by its net income or loss. As a result of using this report, landlords can identify areas to reduce expenses or make improvements to strengthen the business.

Report #2: Schedule E Helper

The schedule E helper report is useful at tax time. This report is unique to RentalIncomeExpense.com. RentalIncomeExpense.com is free landlord accounting software. Landlords file schedule E with form 1040 at tax time. The schedule E helper report follows the same income and expense categories as those on schedule E, and it generates a report to help accountants at tax time.

Landlord accounting software makes it a snap to generate reports. In contrast, using a spreadsheet alone to generate reports is much more challenging. In conclusion, by using a good system for reports and data, landlords can quickly determine how their business is doing.

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General

Helpful Tools for Small Businesses

Tools for Small Businesses
There are many helpful tools that make running a small business easier.

Starting a business is not easy. Managing the day to day activity while trying to grow the business is not easy either. With today’s modern technology and innovative minds, there are many helpful tools for small businesses to make their lives easier. Here are a few to mention:

Accounting/Bookkeeping Tools

Keeping track of income and expenses is important for two primary reasons. First, you need this information to complete income taxes every year. Second, this information will give you an idea of how well your business is doing – Do you have profits? Are you growing? There is a variety of accounting tools available for small businesses. Some are free and focus on a target market like RentalIncomeExpense.com, which caters to landlords and rental property. Some are expensive but applicable to any business like QuickBooks. Whatever accounting tool you choose, know that this tool is pretty important and helpful, especially if you can run reports that summarize how your business is operating.

Communication Tools

Communicating with customers and employees is important. How you communicate and the ease in which you communicate can make running your business easier. Email is pretty standard and in many respects becoming more popular than telephone. Similar to accounting tools, there is a lot of choice with email providers. One of the most popular email providers is Google’s Gmail. For businesses, Google Workspace consolidates a number of tools, such as email and storage, enabling you to better manage operating your business.

Similar to email, electronic signatures are another paperless communication tool that can streamline your business. Whether you need signatures from employees or from customers, using electronic signature software will save everyone time. There are some esignature tools that charge a low flat fee like eSignToday and some that charge a recurring monthly fee like DocuSign.

The tools available make running a small business easier. Some are free and some are well worth the cost. Nevertheless, there is a lot of choice, and finding those that best fits your needs will put you on the road to running a successful business.

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General

Automatic Landlord Income Expense Tracking

Landlord Income Expense Tracking
Automatic and free landlord income expense tracking software makes life easier.

As we’ve already discussed, landlord income expense tracking is an important yet time consuming task for landlords. With all of the options available from a worksheet to landlord accounting software, each one has its pros and cons. We are going to highlight two major pros for landlords using RentalIncomeExpense.com – automatic recording of information and price.

Automatic Landlord Bookkeeping

If landlords want to save some time on tracking rental income and expenses when using RentalIncomeExpense.com, then they should use ClearNow for online rent payment. Rent collected via ClearNow is automatically recorded as income in RentalIncomeExpense.com. Furthermore, fees paid to ClearNow to collect rent online are also automatically recorded in RentalIncomeExpense.com. So just by using ClearNow, landlords eliminate the need to manually record rental income and the associated expense and thus save time.

Free Income Expense Tracking

RentalIncomeExpense.com is free rental property software. It’s hard to beat free. Many will ask, “What’s the catch”, when something so valuable is free. Believe it or not, there is no catch. Designed for landlords, RentalIncomeExpense.com is simple yet powerful landlord accounting software. Because it is free, landlords lose little when trying it out before taking out their wallets and purchasing software for their rental property needs. Beyond free, it also provides reports, like profit and loss, that tell landlords how well business is doing.

Information is powerful. A free tool like RentalIncomeExpense.com makes the mundane task of landlord bookkeeping all the more valuable.

Categories
Landlord Taxes

Landlord Accounting Software vs Accountant

Landlord Accounting Software vs Accountant
Landlords should still track rental property income and expenses even if they use an accountant.

If I use an accountant for tax preparation, should I still use landlord accounting software? We think so. The two primary benefits are information and speed.

Information from Accounting Software

If you own property and rent it to receive income, then you are running a business. Anyone running a business should track income and expenses to understand how well or poorly the business is doing. Landlording is no exception. There are a variety of ways landlords can track rental property income and expenses. We recommend using landlord accounting software because of the powerful information it can provide for you through reports that tell you how your business is doing. For example, a profit and loss statement is a great financial review of the business’ revenues and expenses over a period of time. You may be deterred to pay for landlord accounting software when you are already paying an accountant. Do not fret because there are some excellent and free landlord income and expense tracking software such as RentalIncomeExpense.com and Avail.

Speed from Accounting Software

Maintaining good accounting records makes tax time easier. The reports you can generate from your rental property software will make your accountant’s work that much easier. You don’t have to give your accountant a shoebox full of random pieces of paper to sift through and figure out (which takes time!!). Instead, hand over a few reports that provide the details your accountant needs. For example, with RentalIncomeExpense.com, you can generate a Schedule E Helper report that mimics the Schedule E you will have to file with your taxes. And if your accountant charges by the hour, then by simply using free landlord accounting software to generate reports will save you more money because of the time savings!

The information and speed you will achieve when using landlord accounting software will complement the work your accountant does. You will make your accountant’s life easier, and they will likely thank you!