House Hacking a Duplex - Organizing Receipts for Tax Time

[Art Maydan]

I just bought a duplex to live in and I’m putting together a system to organize our receipts and mileage for tax time. If I understand correctly, I can deduct 100% of expenses related to the rental unit and 50% of expenses related to the entire house. I made a folder for the rental unit and another for the whole house in Google Drive and I’m going to upload PDFs into the respective folders. For the mileage, I created a spreadsheet and I’m going to have the date, mileage amount, trip reason, and whether it pertains to the entire house or just the rental unit.

But what if, for example, we go to buy curtain rods for the rental, shower mats for our unit, an exterior light for the whole building, and then stop at my mom’s house just to visit? How would I record a trip like that? And what if we go to Home Depot and buy a mix of personal things, things for the rental, and things for the house?

And when tax time comes, do I just give these files to our accountant? Am I supposed to go through receipt line by receipt line and annotate what’s personal and what’s for which unit? Or does the accountant do that? Is a mileage spreadsheet adequate or do I need some sort of proof?

Also, my wife is a teacher and her education related expenses are tax deductible. Is there anything special we should know or do since we have two categories of tax deductible expenses – real estate and her job? I just made a Google Drive folder for her to drop her receipts into.

Any other suggestions for maximizing tax write-offs? Much appreciated!