For many landlords the idea of record keeping can be a daunting and boring task. The Norfolk, VA property management, assure us that record keeping can be simplified. A record provides a paper trail and proof of every transaction. The trick is to record every item. There are generally two main categories, that is, income and expenses.
The income is the rent that is received from the residents. The expense is every item that is purchased for use at the rental of the property. For tax purposes, it is important to separate your business funds from your personal funds. If you own more than one property, then have a specific code for each property, to make the accounting simple.
Giving your tenants rent receipts, even when they pay by check, ensures that you have a record of the rental income. When you deposit these funds into your bank account, remember to keep the deposit slips as a record. Additionally this gives a history of your tenants’ payments.
In the same way, when you purchase items for maintenance of the property, or pay the utility bills, ensure that you keep the invoices for every transaction. At the end of the year, these transaction records will tell a story. Don’t forget your mileage is a deductible expense, as long as it can be directly linked to your property, for instance, for tax purposes you can deduct the mileage, for driving to collect your residents’ rent.
Norfolk, VA property management professionals advise landowners to hire a qualified accountant at least for tax preparation. They are competent at interpreting the tax laws and applying them to your accounts.
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KRS Holdings | 2000 West Club Lane, Richmond, VA 23226
Phone (804) 554-3197 | fax (804) 282-4757