Tag: landlord accounting

Categories
Landlord Taxes

Understanding Landlord Auto and Travel Expenses

Okay, maybe not the right vehicle for work commutes in terms of mileage expenses!

One of the categories on the IRS Form 1040 Schedule E is for “Auto and Travel” expenses. Here is a quick explanation to understanding this expense category. By tracking and understanding landlord auto and travel expenses, you will increase your expenses and thus lower the taxes you owe.

Do You Have a Home Office?

First, it is important to understand if you have a separate office for your landlording activity or if you work from home. Working from home is more advantageous.

  • If you work from home: You can deduct any travel that you make from your home for activities related to your rental properties. In this situation, your home office must be your principal place of business and be where you do administrative tasks. If this is the case, you can deduct trips from your home office to your rental properties and back.
  • If you work from an office for your rental activity: Unfortunately, if you have an office where you do your day-to-day rental management, you are limited by the “commuting rule.” Commuting expenses are non-deductible expenses. In general, trips from your office or home to and form your rental properties are not deductible due to this rule. So understanding landlord auto and travel expenses can affect deductibility opportunities.

How Much Can You Expense?

You might think it will take a lot of effort to calculate your automobile and travel expenses. Fortunately, the IRS provides a “standard mileage” rate which is a shortcut to calculating this expense.

With the standard mileage rate, you keep track of the miles that you travel (like trips to Home Depot for rental supplies). Once you have your mileage, you multiply it against the “standard mileage” rate for the year.

You can also do the “actual expense” method. With this method, you track the actual cost of using your car. However, most people do not use the “actual expense” method because it requires more work. You would need to track gas, oil, repairs, and depreciation using your own methodology.

Landlord Auto and Travel Expenses Saves You Money at Tax Time

In conclusion, a lot of landlords do not take the time to track auto and travel expenses. However, tracking it is fairly straightforward. Once you’ve calculated your expense for a trip, you can enter it into free landlord software like RentalIncomeExpense.com so it is stored online and a report can be generated at tax time.

Categories
Landlord Tips

Move in Checklist for Landlords and Tenants

Move in Checklist
The move in checklist is a valuable guide for landlords and tenants.

Lists are helpful tools as they serve as reminders. Grocery, cleaning, and “honey do” lists are just a few of the many popular ones to mention. The move in check list for landlords and tenants is a valuable guide for both parties. They can complete the checklist together during the walk through of the rental property so all parties are on the same page.

Checklist Benefits

For landlords, the move in checklist for landlords and tenants keeps track of the condition of the rental property. It also serves as a reference to identify any damage that may have occurred during occupancy beyond normal wear and tear. For tenants, the checklist serves as guidance for what repairs or improvements should be made prior to or during the tenancy. It also gives tenants an understanding of the condition of the rental before move in.

Checklist Contents

The move in checklist for landlords and tenants should include the main components of each room in the rental property. For example, items to check for in the kitchen would be a working refrigerator and clean and empty cabinets. For each room reviewed, there should be an area to identify any needed repairs or improvements. The move in checklist can also inform tenants on items such as setting up utilities, managing pets, and throwing away trash.

There are checklist-related tools available for landlords and tenants. For example, Zillow offers a downloadable check list. And landlords can use RentalIncomeExpense.com to track expenses related to agreed upon repairs and improvements.

Categories
Landlord Tips

Rental Property Maintenance Expenses

Rental Property Maintenance Expenses
Landlords face a variety of expenses when managing rental property.

Landlords like to collect rent on time and in full. That’s the revenue side of the landlording business. The expense side can vary widely because of unforseeable surprises. Landlords can organize rental property maintenance expenses into two buckets – known and unknown. Understanding these expenses and preparing for them as best as possible are beneficial for landlording success.

Known Expenses

Known rental property maintenance expenses as those that landlords expect every year. Examples of these types of expenses include mortgage payments, insurance premiums, and property taxes. For the most part, these types of expenses remain the same year over year, and they are rarely a surprise to pay when due. Known expenses are the easier to budget.

Unknown Expenses

Unknown rental property maintenance expenses are more difficult to budget because they are . . . well . . . unknown. Many of these expenses are related to some form of repair. For example, the air conditioning unit could suddenly stop working in the middle of a heat wave, and you need to figure out how to remedy the situation as quickly as possible. Or, a pipe bursts and you need to quickly repair it to prevent damage to the tenant’s property or the rental property. To make life easier, it is wise to do your best to plan for the unexpected. Planning can include setting aside a budget for emergencies or a short list of professionals to help in a time of need.

As landlords incur rental property maintenance expenses, they can track them in landlord software. By tracking expenses, landlords can run reports that may help make budgeting easier for future years. RentalIncomeExpense.com follows the Form 1040 Schedule E expense categories.

Categories
General

Should Landlords Use Quickbooks?

Should Landlords Use Quickbooks
Quickbooks is great software for small business. But landlords can do better with other services.

Quickbooks by Intuit is a leading small business accounting software. Landlords often consider Quickbooks to do rental property accounting. However, there are much easier tools for landlords to use.

Quickbooks is too complicated

Quickbooks, by reputation, is not easy to learn. People buy books and videos to answer questions about how to set-up things in Quickbooks.

Moreover, even for Quickbooks experts, using Quickbooks for property management is difficult. In fact, it is challenging enough to warrant a video course on how landlords can use Quickbooks.

Landlord-specific accounting software is easier to use

Fortunately, there is a lot of landlord accounting software available as alternatives to Quickbooks. Just as a handyman has many tools in their toolbox (hammer, screwdrivers, wrenches) to fix problems, the right sized landlord software can make your life so much easier.

For landlords who just need a few reports and simple income and expense tracking, RentalIncomeExpense.com is an easy-to-use and free alternative to Quickbooks. For large property managers with complex needs, there are property management accounting services such as Appfolio and Buildium.

As one example of the benefits of using a dedicated tool like RentalIncomeExpense.com, a landlord can quickly create an IRS Schedule E helper report with just a click of a button. This report contains all categories on the IRS form that their accountant will need at tax time. Try doing that with Quickbooks!

Categories
General

Landlord Accounting with RentalIncomeExpense

Landlord Accounting
Landlord accounting with RentalIncomeExpense.com makes tracking rental property income and expenses free and easy.

Landlords can manage their recordkeeping task in a variety of ways which can range from using a simple paper ledger to expensive sophisticated software. We’re going to take a look at RentalIncomeExpense.com as an ideal landlord accounting solution because it’s free, and it generates powerful reports when tracking rental property income and expenses.

FREE & EASY

Yes, you read correctly . . . RentalIncomeExpense.com is free. Landlords do not need to pay anything to use this tool. Most accounting software, like QuickBooks, Buildium, and RentecDirect, are fairly expensive, especially for the small landlord. Tracking rental property income and expenses is not the most exciting task, but it is a very important task. Making landlord accounting easy where you simply just record dates, vendors/customers, and amounts according to simple drop down menus makes the entire process painless.

POWERFUL REPORTING

Every business wants to know how well it is doing, and landlording is no exception. Generating reports from income and expenses that are tracked is powerful. RentalIncomeandExpense.com provides instant reports that matter, like Profit & Loss and a 1040 Schedule E helper. Because RentalIncomeExpense.com follows the income and expense categories used by the IRS’ Form 1040 Schedule E, the helper report makes tax time easier. You wouldn’t be able to generate such powerful reports if you were using a paper ledger or a simple spreadsheet for landlord accounting.

There is a lot of different accounting software to choose from. Because landlord accounting is such an important task, we encourage you to consider RentalIncomeExpense.com. It’s free and provides powerful reports that tell you how your landlording business is doing all the while making tax time a whole lot easier.