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Updated almost 4 years ago,
How to Setup Accounts for managing RE side hustle - No LLC
Hi there,
So first let me say, I am new to RE investing. Currently, I am looking to do a house hack and renovate the property that I end up purchasing around April. I wanted to know for tax purposes, how I should document everything and what is the best way to make use of the current tax system when it comes to my expenses from RE. I just got a new credit card that I planned to use only for real estate expenses.
1) Can I create a new checking account and savings account to pay off that credit card? And would those expenses be considered 'business' expenses even though I don't have an S-Corp or LLC?
2) For expenses, such as learning material (books, classes, etc.), driving to view properties (gas &/or mileage), buying RE analysis spreadsheets, RE services like Rentometer, and other expenses along this line not necessarily that are purchasing material for rehab for the house. Is there a tax advantage way of doing this even though I do not have an LLC or s-corp? Is there any way for me can have the government legally consider my situation where I can take business expenses to lower my personal taxable income?
Would really love to hear some feedback from someone who was in a similar situation and/or someone with experience knowing tax laws when it comes to side hustles and how to help your tax situation. Thanks in advance!