On April 15th every year, we Americans give a portion of our hard earned money to the government. As real estate investors, we are presented with unique opportunities to lessen the impact taxes can have on the bottom line. However, in order to take full advantage of any tax benefits, it’s important that investors put themselves in the best position possible to do this.
Here are three important tips to put investors on the right path:
1.) Get Organized
This advice is applicable anywhere, but pertains especially to taxes. It can be hard to hear, but there are no excuses for having an unorganized business. Organization is an essential skill for any business owner, but especially real estate investors.
From keeping detailed records and receipts to managing expenses, staying organized is critical when tax season rolls around. For those investors that have the ability and the time, self-managing the bookkeeping may be a viable option. There are a handful of very good accounting programs out there that can help in this area.
I actually kept my own books for the first two years I was in business, but quickly learned that it made more sense to contract this out to a good bookkeeper. Most investors learn early on that their time is better spent managing the business rather than buried in the tedium of bookkeeping. Either way, it’s crucial that you have a system in place to record and archive all aspects of the business.
Hire A Good CPA
A good Certified Public Accountant is worth his or her weight in gold. Navigating tax law in order to maximize your profits can be a very daunting task. An experienced CPA, however, will be able to guide you in structuring your business, as well as maximizing your deductions without crossing any legal boundaries. Keep in …read more