QuickBooks may be the ideal tool for your real estate business. There are various types of businesses within the umbrella of real estate. The set up your real estate CPA will use with QuickBooks may vary depending on your exact industry. For example, a person who is renting out or flipping properties will have different accounts compared to a real estate agent. There are several tools in QuickBooks that may be beneficial to the real estate industry in general.
Setting up QuickBooks for Real Estate Bookkeeping
Both the online and desktop versions of QuickBooks starts with setting up your chart of accounts. The decisions you make at this initial stage will determine how your real estate bookkeeping will be recorded from now on.
One of the first steps your real estate accountant might take is setting up cost accounts for your real estate investments. You may find that some accounts you need are not automatically included in the “Chart of Accounts” that QuickBooks generates, so your real estate accountant may need to adjust them accordingly.
Adding Properties As Customers in QuickBooks
You can add properties as if they were customers. QuickBooks allows you to allocate invoices, bills, and expenses under a customer's name. You can track the expenses and income for each of your properties using the steps below.
1. Choose “Invoices” on the left panel.
2. Select “Customers.”
3. Create a “New Customer” by pushing the button.
4. Enter the name of the property under display name and then click “Save.”
5. Projects can be added under the “Project” tab under the customers name or by selecting it on the left panel.
6. You will be able to fill out necessary details once the project is created and then track income cost and profit.
At Fusion CPA, our real estate CPAs can walk you through using QuickBooks to track individual properties. We can also answer questions you may have on sales tax, property tax, and real estate investing.
How To Do Real Estate Tax Planning With QuickBooks
The distinction between being an investor or a business owner will affect the deductions you can take and how passive losses from rental real estate will impact your bottom line. Business owners can usually deduct expenses that investors cannot.
QuickBooks may help you get all the tax deductions you deserve. Its smart organization feature allows you to sort business expenses by categories, so they are automatically ready to use at tax time. These could include marketing, coaching, or training programs you received, real estate licenses, real estate association dues, and brokerage fees.
Some transportation, travel, and meal expenses may be deductible. QuickBooks makes it easier for you to record these by allowing you or those who work for you to take photos of your receipts and automatically match and categorize these receipts for you. QuickBooks allows you to plan quarterly taxes in advance by automatically calculating how much money you need to set aside. QuickBooks can take much of the time and stress out of real estate tax planning.
How To Make the Most of Real Estate CFO Business Advisory Services
Fusion CPA offers real estate CFO business advisory services designed to help you break down your overall goals into smaller quantifiable goals. We provide guidance to help lead you down your strategic financial and tax planning path.
Our team is ready to help work with you to create a system using software like QuickBooks Online to measure and track the metrics and KPI of your goal. When there is a deviation, we offer to help you correct it and move forward. Fusion CPA does more than just file your tax return. Our goal is to be a strategic partner with you, helping you realize your goals. 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.