rental property income and expenses

[Anonymous]

^^ I hope we get good renters to love and care for the place like we did, and pay the rent on time that's all I ask...here's to a positive experience!

[Anonymous]

Anonymous wrote:^^ I hope we get good renters to love and care for the place like we did, and pay the rent on time that's all I ask...here's to a positive experience!

I research them pretty well. If they have been responsible in the past, it's likely that won't be a problem. Make it clear from the beginning, and be adamant there will be a walk through every 6 mo. We just had one problem, with a lawyer no less. I saw she had high student loans she was late on, one she wasn't paying so I should have known better. Even so I did a 6 mo. lease thankfully! A Harvard graduate who couldn't manage her money and thought she was entitled.

Our best renter lived there 4 years. A Harley guy with a beard and tattoos, and two large pigs! I let him keep the pigs outside in a large dog pen we had for our Newfoundlands. In the summer he had a kitty pool for them and a shade tree. We live out west fyi..no snow.

[Anonymous]

welp, guess you cant judge a book by it's cover!!

[Anonymous]

OP here, thanks everyone. I have already have a CPA but this is my first year he will be doing my taxes to include rental income. I hope the depreciation and other rental expenses I incurred help offset my taxes big time.

One question: I hire a handyman and pay him IN CASH for all the work he does for me. Is that a problem? He gives me receipts but it's a note pad he bought from HOME DEPOT and it doesn't even have his name, number, address on it so I handwrite his info into the receipt. If the IRS ever audits me will this even be enough? He's not licensed and wants all cash but I do give him checks from time to time.

[Anonymous]

Anonymous wrote:OP here, thanks everyone. I have already have a CPA but this is my first year he will be doing my taxes to include rental income. I hope the depreciation and other rental expenses I incurred help offset my taxes big time.

One question: I hire a handyman and pay him IN CASH for all the work he does for me. Is that a problem? He gives me receipts but it's a note pad he bought from HOME DEPOT and it doesn't even have his name, number, address on it so I handwrite his info into the receipt. If the IRS ever audits me will this even be enough? He's not licensed and wants all cash but I do give him checks from time to time.

No as long as you have the receipt from him. However make sure to write in his name and address. I recently went through this with my accountant. We have 2.5 acres, every year I pay them cash to clean it all up. Also, if you pay cash you could attach your atm withdrawal receipt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have a large long term rental since the 90's. Get a CPA to do it, they think of things you'll never know about and are up on the new laws. Keep all your receipts in a folder. For example: any work done, hardware, painting, pool service, home depot, landscaping, advertising, credit check expenses etc.

Never throw them away because if you sell the home you can use all that for depreciation to offset the taxes you will have to pay. Do NOT do Turbo Tax.

I use Turbotax and it works fine. I save all receipts related to the property, and just keep a simple Excel spreadsheet with a list of those expenses.

Then I sum it up in Excel, and enter the number for each category (interest expense; property taxes; maintennce; etc) in separate boxes in Turbotax. It works fine.

One year I had an accountant do our taxes also to compare, and they screwed up the depreciation (not in our favor) on some improvements to the rental. Turbotax did it correctly since it asks you details about the improvements and knows what schedule to use.

At least for my rental properties, I have less than 10 line-items of expenses each year (maintenance mostly) so it's not that much of a hassle. Takes me under 10 minutes.

Same here...got 5 rentals, 2 homes, self employed, investments..Turbo Tax Home and Business is what I use. Get a fast fujitsu scansnap and scan all receipts, tax forms, etc. as you get them and file them under different folders in your hard drive. Tax is a breeze if you're organized.