Flipper/Rehabber · Chicago, IL · Member since 2016 · 123 posts · 38 votes
Hi. I'm a new member from Las Vegas. I'm at the beginning stages of my investing (love the podcasts) and was wondering if any veterans out there had any 'Tax Hacks'.
I've considered getting a separate credit card just for my rental properties, but was wondering if it would need to be a different card for each individual property. I've thought the same for checking accounts at the bank. Can all rentals be used by one credit card and one separate checking account then have another of each for personal stuff?
Also, is there any phone apps anyone uses where you can log expenses so they don't have to keep a shoebox full of receipts. Anything to keep track of everything for rentals; looking specifically at single family homes now. Does anyone have any other tips for making tax time a little more bearable. Thanks.
I use Expensify to track my expenses and the app allows you to snap a photo, categorize, and label expenses and then you can just send your accountant (or yourself) an expense report at the end of the year. You can also customize the tax categories to match your needs. There are also a few mileage tracking apps out there which work well.
I also use Evernote which has a great document capture camera to keep an archive of all my receipts.
Detail, detail, detail is the name of the game if you ask me, and the more you do upfront the easier it is down the line when you need the information.
I am assuming that all your rentals are in your own name and not owned by a business entity.
If so, then you should be fine with one checking account just for your rentals. Your bookkeeping system can tag income and expenses with a property ID or use subaccounts to keep track of income and expenses by property.
Since you are a sole proprietor, there is no issue with co-mingling funds and using the same checking account for both personal and rental activities, but, it is much simpler for record keeping to have a separate checking/savings account for the rentals.
I have charged stuff on my personal credit card for my rental properties, because I get "rewards" for my charges. I don't carry balances, so there is no interest charge to worry about. At the end of the month, I just draft my rental checking account to pay the credit card charges. Again, no problem with co-mingling funds if you are acting as a sole proprietor.
If you are maintaining a business entity for your rental properties, then you do want complete separation between your personal and rental business. You can still use one checking account/credit card for all your rental stuff and have separate accounts for your personal stuff.
I use Expensify to track my expenses and the app allows you to snap a photo, categorize, and label expenses and then you can just send your accountant (or yourself) an expense report at the end of the year. You can also customize the tax categories to match your needs. There are also a few mileage tracking apps out there which work well.
I also use Evernote which has a great document capture camera to keep an archive of all my receipts.
Detail, detail, detail is the name of the game if you ask me, and the more you do upfront the easier it is down the line when you need the information.
My rentals are owned under a Single-Member LLC which the IRS regards as a Sole Proprietorship. My CPA told me to just record a journal entry for expenses bought from personal accounts or credit cards as an Owner Contribution in my accounting software.