As a landlord, managing your finances is just as important as maintaining your properties and screening potential tenants. If you don’t keep a close eye on your financial matters, you could face serious financial issues. We understand that handling your finances can be particularly challenging, especially if you own multiple properties, but it’s an area you simply cannot ignore.
To help you stay on top of your financial responsibilities, here are some useful tips:
**Consider Hiring an Accountant**
If math or accounting isn’t your strong suit, it might be a good idea to hire an accountant. A skilled accountant can help you organize your financial records and take care of your tax concerns, ultimately saving you time and effort.
**Keep Track of Your Expenses**
Accurately recording your expenses is vital. Every property you rent out will have costs for maintenance and repairs. Keeping tabs on these deductible expenses makes it easier to manage your tax bill each year. Also, remember to track everyday expenses like fuel, landlord insurance, and phone bills, as these can also be claimed back. Make sure to note each expense, including the date and reason for it. This will simplify things when it’s time to pay taxes.
**Track Your Income**
It’s important to keep an accurate record of your earnings. This can be incredibly helpful for your accountant during tax evaluations. Keep a consistent log of your monthly income for better clarity.
**Organize Your Expenses**
Rummaging through your office for receipts and documents at tax time can be a nightmare. Avoid this hassle by organizing your expenses and keeping your records in order. Try storing all your receipts in one folder, with each month separated by dividers. This will make your accountant’s job much quicker and easier during tax season.
**Save Your Receipts**
Don’t throw away your receipts even after your yearly accounts are settled. Keep them for six years to cover any unexpected tax disputes. If you don’t keep your receipts, you won’t have proof of those expenses. It’s essential to retain your receipts in case they are needed, although after six years, you can safely dispose of them.