9 Real Estate Agent Accounting and Tax Tips

Managing your own real estate accounting gives you unrestricted access to your finances, invaluable insights into your performance, and the means to streamline your daily property management responsibilities. But, there's a better way.

Here are nine tips to help you maximize your accounting productivity throughout the year.

  1. Work on your accounting all year.
  2. Know what to track.
  3. Categorize income and expenses.
  4. Learn to create and understand accounting reports.
  5. Utilize metrics to supplement your real estate accounting.
  6. Let technology do the heavy lifting.
  7. Reduce your real estate accounting paperwork.
  8. Make the most of automation.
  9. Work from absolutely anywhere.

Plus, five tax tips you should know.

  1. Don’t forget your mileage. Keep track of your mileage using a cloud-based app to store all your information.
  2. Classify the people on your team correctly. Make sure you’re not classifying W-2 employees as independent contractors. Independent contractors should be issued a 1099 form, while actual employees get a W-2.
  3. Pay attention to how you expense client gifts. That means if you’re buying a big-ticket item for your clients, like a washer or dryer, the amount you can claim is limited because it’s still classified as a gift.
  4. Remember to save for retirement. If you’re at the start of your career and still in a lower tax bracket, you might want to consider funding a Roth IRA. Roth IRAs don’t provide a tax break for contributions, but when you pull the money out of the Roth IRA it’s usually tax-free. If you’re in a lower tax bracket right now and don’t need the tax break you might want to consider this as an option to save for retirement.
  5. File for a tax extension if you cannot organize your documents by April 1. If tax day is coming up too soon for you to get organized, you can file an extension so that you can file taxes at a later date, six months in the future. But remember, this extension doesn’t allow you to pay your taxes at a later date. You’ll have to pay an estimate of what you think you’ll owe on time. Then, when you file your taxes, you’ll be able to account for any adjustments.

Taxes can be tricky, and making a mistake can be costly for you and your business. Avoid thane extension and file on time. Reach out to us soon to make a tax-preparation appointment.