It’s that time of year again, and everyone across the nation is getting prepared to file their taxes for the 2019 fiscal year. Whether you’re a novice or an expert real estate investor, dealing with business taxes can be a real pain. While tax returns aren’t due until April 15, 2020, preparing now can save you a massive headache.
Here are 5 ways real estate Investors Can Prepare for the 2019 Tax Year Today.
1. Find a Well-Rated CPA or Tax Strategist Who Works With Real estate Investors.
If you don’t already have a CPA (Certified Public Accountant) or a Tax Strategist, then now’s the time to start looking since some of the best CPA’s get booked up well in advance. When searching for a good tax advisor, do your homework. Read online reviews and make sure they work with other real estate investors. Ask other real estate investors who they use. A skilled tax advisor can save you a good deal of money. Especially if they fully understand our industry and know how to get you the best deductions.
2. Get Organized with a List of Tax-Related Documents You’ll Need.
Ask your tax advisor for a list of what all they need from you to complete your tax return. Most CPA’s will send you a list upon booking your appointment, or they will tell you what’s needed over the phone. Don’t wait until the last minute to find these documents! Duplicates of missing documents could take weeks to arrive. And if you lost last year’s tax return, the IRS can take six weeks to mail a copy to you.
3. Receipts, Receipts, Receipts…
Work on gathering all of your receipts for business expenses incurred over the past year. You should be collecting these throughout the year so you’re not scrambling last minute to find a backup of your deductible business expenses. If you don’t like keeping paper receipts, that’s okay. Scan them to yourself throughout the year and save them in a folder. Better yet, use accounting software like QuickBooks that has a mobile app where you can upload receipts in real-time when you pay for business expenses. Don’t forget to keep up with your mileage too!
4. Prepare and Finalize Your Income and Expense Reports.
This is a must-have for all CPA’s and Tax Strategists. Utilizing an accounting software like QuickBooks to track your income and expenses throughout the year makes this a breeze. Your reports should include all income and all expenses incurred during the 2019 fiscal year.
5. Prepare Questions for the Meeting With Your CPA or Tax Strategist.
Keep a list of all questions that arise as you’re gathering your tax paperwork. While you have their direct attention, this is a great time to get your questions answered fully. Consider asking them about how you can save more on your taxes. If you’re looking to save for retirement, ask them about your options and how much investing in your retirement could save you. Be sure to be upfront and honest with your CPA and let them know if you can’t afford a tax bill. They can help you schedule an extension if needed or assist in setting up a payment plan with the IRS.
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*Disclaimer: This article has general information on the subject matter and should not be taken as tax advice or legal advice. Each business and personal tax situations are different. Should you need tax or legal advice, consult with a tax expert, your CPA, an attorney, or other financial advisor.