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Getting Your Property Management Company Ready for Tax Time

Getting Your Property Management Company Ready for Tax TimeHow prepared is your property management company for tax time? It’s important, because just one single error could cause infinite and costly headaches down the road. This, coupled with the fact that others are relying on you for timely, accurate records, and this time of year can seem like a nightmare to some. The good news is, with the right strategy, you should be able to get organized enough to make tax season a smooth, stress-free experience for everyone. Here are a few expert tips to get you started.

Clean up your data

Despite the fact that the sources you import your data from may be reliable, there’s still a very good chance that some of the information you’ve currently got in your system is inaccurate. This can spell trouble when it comes time to file, so head it off at the pass by scrubbing your data in advance.

Specifically, you should verify that all funds are allocated properly to avoid over or under-stated deductions. You’ll also want to make sure that identifying information of your employees – like dates of birth and social security numbers – are complete and accurate. This ensures that your workers won’t run into any snags when they go to file their personal tax returns.

Use technology to your advantage

One of the biggest benefits of property management software is that it provides the ability to perform in-depth analytics, which allows you to search for existing anomalies. For instance, you can use your analytics tool to identify things like missing digits in zip codes or years of birth, or too many digits in a social security number.

Get your files in order

When it’s time to file, the less running around you have to do, the better. The bigger the property management company, the more organization will be required, so be sure to plan accordingly. Some of the files and documentation you’ll need to streamline tax filing include:

  • All necessary tax forms and associated instructions
  • Bank account reconciliations (keep an eye out for any unusually low or high transactions)
  • Confirmation of updated personal information for employees
  • Year-end financials to ascertain profit/loss that include:
    • Employee earnings
    • Owner statements
    • Vender transactions
    • Purchase orders
    • Capital asset activity
    • Mortgage interest

Remember to double check the updated tax laws as well. Things change from year to year, so verifying what’s different can ensure that you’ll be able to get the deductions, credits and adjustments you are entitled to. And again, be sure you’re utilizing the tools and technologies that are available to you. Property management software can save you a ton of time and improve the integrity of your data, making it faster and easier to report and file everything you need.

Tax season can be a stressful time, especially if you’re trying to run a busy property management company. Thankfully, it doesn’t have to derail your productivity. Just follow the preparation tips above and you’ll be well on your way to enjoying a smooth, uneventful tax filing experience.

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