If you own either residential or commercial rental properties, it is important to have an overall understanding of the tax laws and requirements for those properties and the taxes for the income from those properties. An experienced tax accountant can help educate you on everything you should know regarding the taxes for your business.
Knowing what is needed and what can be dedicated will allow you to track expenses more accurately and ensure that an effective process is in place to not only track income and expenses, but also to maintain needed receipts and documentation. However, it is still essential to use a tax accountant. Even if you have a basic understanding of the laws and expectations placed on investment property owners, the laws are always changing and evolving. You want to an expert to take the lead, so you can focus on growing your business and avoid getting into any sort of trouble with the IRS.
When you buy investment property, the first thing you need to do is find a great tax accountant. Simply buying a property will be your first need for a tax accountant to help you navigate the early stages of your business. If you already have rental properties, you should already have a tax accountant. However, it is important to know how your accountant is doing so that you can decide if and when you may need a new accountant.
If at any time, you do not feel that your tax preparation services are not helping you in every way possible to avoid paying unnecessary taxes or fees, you should look for a new tax service. You need to find a great tax accountant, who knows the laws inside and out and can help you save the most money possible. Tax accountants go through continuing education, so they should be on top of all changes in the tax laws and how they may or may not impact your business.
For people that own rental property, there are two basic types of expenses that you can deduct on your taxes; ordinary expenses and necessary expenses. For example, a necessary expense would be rental property management software that would allow you to maintain accurate and timely records of everything pertaining to your business. Another example of a necessary expense would be paying a tax specialist. These types of expenses are appropriate for that type of business and helpful in maintaining order and profit in your business.
Ordinary expenses would include having to pay a contractor such as a plumber or an electrician to do needed work on your properties. These types of expenses are considered common and even expected. These are all tax deductible.
It is important to maintain receipts and other documentation to support any expenses that are being deducted. This will enable you to verify expenses should you ever be audited. This also applies to home office expenses. If you have a home office used exclusively for your investment property business, you can deduct the cost of that space including a portion of the house utilities based on the square footage of the home office and the square footage of the entire house. A tax accountant will help you figure out what your maximum dedications will be.
This is why it is so important to find a great tax accountant. The accountant with the most experience specific to the investment property industry will be the best option to ensure you are getting the most out of your business. You may be wondering how you can find a great tax accountant. There are many approaches. You should ask other investors who they are comfortable working with, do a search for accountants in your area, and read online reviews and testimonials to see what others think of a particular firm or individual.
the most important thing is to not wait too long to find someone. If you wait until taxes are due, you are going to end up settling for someone who is available, opposed to someone who is qualified. Give your business what it deserves with an experienced and professional tax accountant.