The Basics.....

[Ivan M.]

Long story short..I have one rental (been renting it out for past 10 months) and it is fully paid for and I want to be legitimate with taxes, deductions, etc. I want to keep things as simple as possible, so I guess my questions are:

I don't have an LLC set up or a separate bank account. They write me a check and I deposit it in my primary bank account. Expenses are paid for out of my primary bank account or with my American Express card. I save the receipts and I have not yet had to deal with taxes, but will be soon enough.

Do I really need to set up an LLC for one rental property?

Anything I can do to my advantage tax wise / income wise vs. being a sole proprietor which I suppose is what I am at the moment?

Do I really need a separate bank account...with or without an LLC? I keep pretty good track of all my expenses with mint.com.

I have a million dollar umbrella policy through my homeowners insurance company. Do you think this is sufficient protection?

For tax time, can simply fill out the correct forms and claim the expenses have incurred thus far..won't turbo tax handle fairly easily? Do I really need an accountant...I hear they make up their fee in creative accounting....

What are examples of tax deductions that I may have not thought about that I could claim...I now have repairs, mileage, postage, some office supplies? What about property taxes, HOA dues, homeowners insurance on rental? Any other creative suggestions?

Should I have really issued a 1099 form to a moonlighting plumber I know that replaced a water heater...cost was 650.00? What are the ins and outs of this form?

Anything else you'd like to share for a guy who's simply trying to legally keep as much money in my account vs. the government's...and also basic ways to protect myself from liability issues with tenants?

What else am I missing?

Thank you all for any input you may have.

navifoto

[Jerry W.]

@Ivan M. Welcome to BP. You can have your property in your own name. Your insurance level sounds good as long as it covers your rental. You do need an accountant, I prefer a CPA. Yes you need to issue a 1099. Your accountant can help. Lack of money is not a good defense to the IRS. Do it right, and sleep better at nite. If the price is too high shop around. If all of them are too high get out of real estate. Good accounting is an expense just like paint and plumbers.