“Hooray! It’s almost tax season again!” – said no one, ever.
Very few people actually look forward to doing their taxes. Add this to the already extensive nature of the property management business, and you’ve got quite the chore on your hands. With so much involved, preparing and filing your taxes can be incredibly disruptive, taking precious time away from other important duties.
The good news is, there are things property managers can do now to prepare in advance and make the tax season a little less hectic, a lot less stressful and much more efficient.
Ideally, you’ll have already positioned yourself and your business ahead of the game by keeping meticulous, up-to-date records all year. Even if you’ve slacked in this area, however, here are a few tips for avoiding a potential whirlwind in the coming weeks.
Get “in the know”
Like it or not, tax laws are a fluid thing. Many of the changes that may have taken place since the last time you filed could impact your business. If haven’t already, take some time to get up-to-date on any and all recent modifications to federal and local tax rules.
If you’re not sure where to start, here’s a great resource for property managers. Or, speak with your accountant. He or she should be able to quickly get you up to speed on any and all changes that may affect you and your property management business.
Take advantage of deductions
Many property managers overlook a lot of the deductions that are available to them, simply because they’re unaware. For instance, if you purchased insurance coverage for your business (which you most certainly should have), that premium may be tax deductible. Some examples of other commonly neglected deductions include software and/or computer expenses as well as vehicle mileage.
The quickest way to find out what yo u’re allowed to deduct so you can start gathering the appropriate documentation in advance is to speak with a tax professional. And make sure you’re always keeping track of expenses, such as what you spend on maintenance, repairs and general operations. Some of these expenses may seem too small to be bothered with, but over time, they can really add up.
Turn to technology
Being well-prepared when tax season arrives requires a good year-round system, and that system should involve as much technology as possible. Property management software, in particular, can be the cog that drives this system and keeps you organized throughout the year. By consolidating, maintaining and storing data in one central location, everything you need will be right at your fingertips come tax season.
As an example, property management software that supports incoming as well as outgoing payments can make it super-fast and remarkably easy to track revenue as well as expenses. Property managers that let technology do the heavy lifting don’t have to waste hours, days or weeks trying to hunt down and verify information. Every document they need can be printed or shared electronically at the click of a button.
As a busy property manager, you’ve got enough to worry about without having to add a ton of research and tax-prep to your growing to do list. By implementing the three simple tips above, you’ll save a ton of time and find yourself in a great position when it comes time to file. Imagine that!