Tag: rental property income and expenses

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Importance of Landlord Record Keeping for Rental Property

Record Keeping for Landlords
Landlords use RentalIncomeExpense.com to easily track income and expenses.

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.

Worth It

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!

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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.

Categories
General

Recordkeeping for Landlords

Owning and managing rental property is a business activity. Depending on the number of properties you own, landlording can be a full- or part-time gig. Whether you create a separate business entity or not for your rental property, recordkeeping is important primarily for tax purposes and therefore requires two types of records: (a) a record of your income and expenses, and (b) documentation of your income and expenses.

Income & Expense Records

Tracking rental property income and expenses will help you complete rental property-related tax forms, such as Form 1040 Schedule E. The tax forms will determine if you earned a profit or incurred a loss for that year from your rental property. Because Schedule E is organized by each property, you’ll want to be sure to keep income and expense records separate for each rental address.

Supporting Documentation

Documentation of your income and expenses will come in handy if you are audited. Receipts, credit card statements, and cancelled checks will prove the income earned and expenses incurred should the IRS question the information reported to them. Supporting documentation will create a paper trail and prove that your claims are correct and the tax deductions you receive are legitimate.

Worth It

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, let you know how your landlording is doing financially, and provide overall piece of mind.