In addition to other necessary tasks such as sustaining property maintenance and screening potential tenants, managing your finances is a critical responsibility for you as a landlord. Failing to do so could lead to significant financial irregularities. We recognize that maintaining control of your financial affairs as a landlord, particularly when you own multiple properties, can be incredibly strenuous. Nevertheless, your finances are an aspect you cannot afford to neglect.
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In order to assist you in establishing and maintaining organized finances, we have compiled some useful tips for you:
Consider Hiring an Accountant
If mathematics or accounting isn’t your strong domain, then hiring an accountant would be beneficial. A competent accountant can assist you in organizing your financial records and handling your tax concerns, thereby saving you time and resources.
Keeping Record of your Expenditures
Keeping an accurate account of your expenses is essential. Every property you let out incurs expenses for maintenance and repairs. Keeping track of these refundable expenses can simplify the processing of your yearly tax bill.
Also, remember to jot down everyday expenses such as fuel, landlord insurance and phone bills, as such costs can also be claimed back. Maintain a record of each expense, including its date of occurrence and purpose. This will simplify your accounting routine when it’s time to pay taxes.
Income Tracking
Ensure you have an accurate record of your earnings. This could assist your accountant significantly during the tax evaluation phase. Keep a consistent record of your monthly income for clarity.
Organized Approach to Expenses
Scavenging through your office looking for every receipt and document for your tax can be highly undesirable. Prevent this chaos through organized handling of your expenses and orderly storage of your receipts and documents.
Try keeping all your receipts in a single folder, each month separated by dividers. This will expedite your accountant’s work during tax evaluations.
Preserving Receipts
Avoid disposing of your receipts even after your yearly accounts have been finalized. Retain them for six years to handle any unexpected tax disputes or similar issues. If the receipts aren’t preserved, you won’t have any evidence of those expenses. It’s crucial to safely keep your receipts if they are needed. Though after six years, you can safely dispose of them.
