Many people love the idea of getting into rental properties. There are so many great things that you can do when it comes to this kind of second income source and many people love the idea that they can work from home, meet a lot of great people, and make some good money. But before you can see this all come to fruition for you, it is important to learn as much about real estate, especially the real estate in your area, and find out whether or not you are really ready to take on this big undertaking. While it may seem like an easy and amazing way to make some money, it does take some and energy to see the results.
If you are looking to get into real estate, it is important to get your business set up right. It isn’t going to do you much good if you are making money but aren’t taking care of your expenses or worrying about taxes in the process. For those who are thinking about getting into rental properties as a side or full time income, consider hiring a tax professional to help you out. They can answer your questions, help out with bookkeeping, and even make sure that your tax return is done on time.
Keep Good Bookkeeping Records
When you run a rental property business, or any other business for that matter, you need to be able to keep track of all the records that go on. Each time you purchase a new building, you need to keep the cost of purchase, as well as any costs to fix up the building or get it leased or sold, all together. You need to keep track of the money you make from rent each month, or how much you make when you sell the property. Any time you earn money or spend it, you are responsible for keeping track of all this information to make your tax season easier.
You can choose to either do your bookkeeping on your own or hire a tax professional to help you out. A tax professional can help you keep all of this information in order, making it easier to see how the business is doing at a glance without having to give up valuable time. Whether you need just a little bit of help at the end of the year or you are looking for someone to take on all of your monthly bookkeeping needs, make sure to hire a professional you can trust to get it done right the first time.
If you have done a good job with all the record keeping throughout the year, you are going to find that it is easier than ever to take on your taxes at the end of it thanks to having your receipts and income statements all lined up.
Consider All the Deductions
There are a lot of deductions that you could get when it comes to running your own rental property business. If you have to pay for insurance for the properties, you may be able to deduct some of this expense, as long as you have the right receipts in place to prove that you had these expenses. If you did a lot of fixing up of the home, these can be deducted as well. Supplies and advertisements will fit into this category as well, you just need to learn how to keep the right records.
Figuring out which deductions are going to work the best for your rental property business is never easy. There are many different deductions and finding out the ones that work for you compared to someone else is not an easy task. Working along with a tax professional is one of the best ways to ensure that you are lowering your tax bill and keeping more money in your pocket. They will look through your situation and make sure that you aren’t missing out on easy ways to save money.
Get Taxes Done On Time
As a business owner, you need to make sure that you get your taxes done on time. If you have been doing all the other steps the right way, this one should be easy to accomplish. You will need to keep up with all of your bookkeeping and have all the receipts on hand. This will help you to file your tax return properly so you can get them done on time.
When you are ready to get your taxes done, you will simply need to take in your information to your tax professional. They will have the information that is needed to help you get everything done on time. They can also answer all of your questions and ensure that you are getting all of the deductions that you deserve to save as much as possible on your tax bill this year. While you can do the tax return on your own, it is much better, and can save you a lot of money in the long run, when you work with your tax professional.
Hiring a tax professional is one of the best things that you can do for your rental property income. This allows you to work more on your business without having to worry about the taxes all of the time. Contact our offices today to get started on your taxes and save as much money on the tax bill as possible.
Kenneth M Perkins CPA/PFS