Accountants: What Your Schedule E Clients Need to Know This Tax Season

The wrong tools can prevent accountants and CPAs from properly helping their schedule e clients and prevent them from scaling their portfolios

Traditionally, landlords and property managers have had to manage their accounts through spreadsheets or on paper. However, these traditional methods often result in messy end-of-year accounts with various disparate spreadsheets, pages of printed bank statements, and folders of paper receipts.

Small business accounting software like QuickBooks for rentals is one way to help. However, unless you really know what you’re doing, it can be clunky and overly complex making landlord bookkeeping more challenging than it needs to be. This can prevent accountants and CPAs from being able to properly help their schedule e clients and may prevent clients from scaling their portfolios.

Problems Schedule E Clients Need to Address

Incorrect expense categorization

The miscategorization of expenses and income becomes a real issue during the tax season. Even if your client properly formats their spreadsheet and keeps detailed up-to-date records for you to work off, if they’ve entered expenses incorrectly then they could end up being unable to deduct them.

Even minor misclassification errors can have serious consequences, for example:

  • It may result in the failure to report deductible expenses and the overpaying of taxes
  • Can distort a landlord’s calculation of operating profit margins
  • Can increase costs associated with error correction

Errors from paper receipts and lack of organization

Your Schedule E clients need to keep receipts for their records. However, paper receipts are easily lost, hard to organize, and easily fade. Plus, over the course of a year, there might be hundreds or even thousands of small expenses which need to be added up.

More often than not, the smaller expenses will simply get missed. These small expenses can quickly add up to hundreds or even thousands in missed expenses.

Missed expenses

We’ve already talked about how lost paper receipts or incorrect expense categorization can lead to some expenses getting left out at the end of the year. On top of this though, there are other reasons an expense might get missed. For example, if it’s not dealt with in real-time or the investor is unable to remember the exact amount, it may simply be forgotten.

Financial Planning

There’s more to bookkeeping and accounting than filing an accurate tax return. As a CPA or accountant, offering additional financial planning can be a good way to help your clients grow their rental businesses.

In order to do any form of financial planning though, you need data. With accurate up-to-date data from the previous financial years, you can help your clients get additional funding from lenders, scale their business, and optimize their cash flow. Ultimately helping them achieve their financial goals.

A once a year job

Most landlords don’t keep up-to-date accounts in real-time. Instead, they leave it for the very end of the year. This leads to a vast and unmanageable administrative task and could potentially negatively impact your client’s business.

Tips for your Schedule E clients


Do they know everything they need to know about what expenses they should track? How to categorize them, the difference between capital expenditures and repairs, how to calculate depreciation, and how to depreciate non-deductible assets, for example.


Do they have a long-term financial plan in place? Do they have the data to achieve their long-term financial goals? Why are they investing? Is it to build a pension, grow wealth to pass to their children, or to build a sizable full portfolio and sell the business as a whole? Or are they perhaps looking for cash-flowing assets to supplement their current income? All of these goals require a slightly different investment approach, but all of them can be planned for and achieved.


Without accurate up-to-date books, growing their business and filing accurate tax returns is going to be a lot harder. With appropriate software, such as Landlord Studio, your Schedule E clients can automate rent collection and income tracking, digitize receipts at the point of sale (no more manila folders or lost receipts), connect their bank account to view and reconcile transactions, and more.

Real-Time Data Management

Once you’ve got accurate books that are up-to-date, you can run reports to analyze data as and when you need to. Essentially, with the right software, you and your clients will have access to all of the data that you need to build out financial projections and plans.

Find out more about how you can help your Schedule E clients with the Landlord Studio accountant partner program →