Are you looking for a way to turn your accounting system into a hot property? Yes, being in the property game means having solid real estate investment tax planning and accounting practices. In your industry, without the proper financial framework it will be difficult to forecast and maintain any sustainability. Is everything in order with your real estate investment bookkeeping strategy? Let's talk about some upgrades that could put you in a whole new neighborhood of revenue.
Is Your Plan Changing Along With Tax Updates?
Tax changes from 2018 have dramatically changed the way property investors handle their books. Make sure you're in the loop regarding the new tax deductions that are available for you. If you're a landlord, almost every bit of repairs and maintenance you do at your rental can qualify for deductions. What's more, costs associated with legal fees, office space, property tax and home insurance can all be deductible. As a landlord, you may also have some questions about depreciation. Did you know that you can begin claiming depreciation as soon as your property is ready for renters instead of waiting until a new tenant actually moves in?
One of the biggest questions that newer property investors and landlords have about real estate investement tax planning has to do with capital gains. Yes, most people in real estate dread the idea of selling an investment property because they're taxed on the profit. However, it's not a given that you'll be forced to pay this tax. You can use strategies like investing in a new property within a certain window of time to avoid capital gains taxes in perpetuity.
A Solid Real Estate Investment Accounting System Is Everything
Keeping track of recipients for everything involved in your investment property is essential for tax purposes. Are you struggling to keep track of receipts and payment records? For most property investors, a booking platform that allows you to upload receipts, track payments and handle tax planning can turn what would otherwise feel like a full-time job into a quick task. This is helpful for avoiding the need to defend your deductions if the IRS ever has questions.
The other benefit of having a uniform system for real estate investement accounting is that you can keep track of the performance of your property portfolio. This applies whether you rent out a single home or manage a roster of flip houses and rentals. Here's what reports should show:
- Cash flow
- Net worth
- Year-over-year performance
- Individual rental performance
Having data and reports at your fingertips is essential for raising capital with lenders and partners. You can make proposals easily because you can share organized data showing past performance. It's also extremely important to stay on top of cash management to ensure you're covering property costs.
Discover Smart Real Estate Investor Bookkeeping For Higher Profits
Did you know that working with a real estate investor accountant is yet another expense that you can deduct for tax purposes? There's no reason not to work with a real estate investor CFO business advisory team if your goal is to increase profits and reduce your tax burden. Our team hear at Fusion CPA can help you run your investments better regardless of the size of your portfolio. Sit down with a real estate investor CPA to discuss a plan for long-term growth. Our real estate investor CFO business advisory services combine financial knowledge and tech to provide automated, smart tools for growth and management. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.