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Landlord Studio, Rental Accounting

How To Track Rental Property Expenses On The Go

Real estate investing allows you to leverage your cash and build equity in a cash flow positive investment. This though isn’t the only benefit of real estate investing. One of the additional benefits, if managed properly, is the potential for deducting real estate expenses which can minimize your outgoings dramatically. 

There are several regular expense deductions that you need to track, such as depreciation, mortgage interest and pass-through taxation. These expenses can be set up as recurring expenses in a landlord app such as Landlord Studio so that you don’t need to worry about tracking them manually.

However, not every expense is routine. Many will be one-off or otherwise irregular expenses. For example, maintenance or management costs. These expenses can build up over the course of the year to make up a sizeable chunk of your deductible expenses and it’s important that they are properly recorded with associated receipts as proof in order to claim these expenses back at the end of the year.

Using a system like Landlord Studio you can stay organized throughout the entirety of the tax year which will inevitably save you time, sanity, and money.

10 Expenses You Need To Track

  1. Interest: The interest on your mortgage or credit card payments are tax-deductible.
  1. Depreciation: You can deduct the price of the property against your taxes over the course of 27.5 years
  1. Travel: Travel expenses conducted for the sake of your rental property management can be deducted.
  1. Repairs and Maintenance: Maintenance work done on your property along with any necessary repairs are deductible, however, it’s important to note that expenses that are deemed “improvements” to the property are not.
  1. Personal Property Used in the Rental: For example, whiteware, furnishings or tools.
  1. Insurance: It’s important to have proper coverage to protect yourself from potential incidents such as fire, theft or even lawsuits. These necessary expenses can be reclaimed at the end of the year.
  1. Property Management Costs: Costs like the Landlord Studio app which are for the running or management of your property portfolio can be deducted.
  1. Pass-through tax deduction: The pass-through tax deduction lets U.S. taxpayers deduct as much as 20% of their business income that comes from “pass-through” entities such as LLC’s.
  1. Employees and Independent Contractors: You can deduct wages of aunty full or part-time employees hired to help you manage or run your property portfolio.
  1. Legal and Professional Services: Accountants, attorneys or other professional help.

We go into more detail on these here: Tax Deductible Expenses Landlords and Rental Income

Landlord App expenses on the go

A Landlord App To Enter Expenses On-The-Go

Landlord Studio is available on all devices meaning you can easily update your income and expenses wherever you are whenever you need to. This effectively means you no longer have to sit down at your computer at the end of the day or week and spend hours entering expenses. Instead, enter them as you go.

The IRS requires you to keep all your receipts as proof of your expenses. In the past this has resulted in shoeboxes and filing cabinets bursting with old receipts. This is at best unwieldy, at worst sorting these could take you hours or even days.

Thankfully there is a better way. A Landlord App like Landlord Studio means you can track income and expenses from anywhere, anytime.

Use your phone camera to digitize your receipts as you get them and attach them to the relevant expense.

Our smart scan feature makes this even easier. The software will automatically read the details in the receipt image and input them into the expense fields for you. All you have to do is hit save.

By doing this you can avoid the build-up of large admin tasks at the end of the month or year and you won’t miss a single expense which could save you thousands of dollars over the course of the year.

3 Expenses To Keep Track Of As They Happen

1. Personal Property: Personal property that is used in or for the property can be deducted as a property expense. For example whiteware in the property. Or tools that you buy for maintenance purposes. Or stationary etc.

2. Repairs vs. Improvements: It is important to differentiate between work carried out on the property. Work done that is classified as improvements are not deductible. However, work carried out which is deemed as maintenance or repairs is.

3. Mileage: Mileage can be a large deductible expense. However, you need to carefully record the distance, date and reason for travel if you want to deduct your mileage.

We have a built-in mileage tracker to make this as easy as possible for you.

For more information on how to record mileage with Landlord Studio read our article here: Landlord Studio Mileage Tracker

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Landlord App expenses on the go

Important Features Of Our Landlord App

Bank Feeds

Connect your property related bank accounts to view income and expense feeds from the app and quickly reconcile income and expenses against relevant properties.

Advanced Reporting

You can run instant customizable reports through our software to gain clear financial oversight. We even have a IRS form 1040 Schedule E Schedule E form 1040 report designed to make filing your end of year taxes as easy as possible.

How Much Can You Deduct as A Landlord?

According to the IRS, if you actively participated in the management of your rental property, you may be able to deduct up to $25,000  against your income each year.

However, let’s say your property brings in $20,000 but you spend $50,000 on it that year. You’d record a loss of $30,000 which is more than the allowed limit of $25,000.

In this scenario you deduct the $25,000 from your current tax year and then carry over and “recapture” the remaining $5,000 in the following year. If you continue to have losses of more than $25,000 then you can continue to carry over the losses beyond that amount year after year.

For more detailed information read the IRS Publication 925: Passive Activity and At-Risk Rules

Related: How to Transition from Spreadsheets and Paper to a Modern Rental Property Accounting Software


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Ben Luxon

"Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks. His love of travelling has taken him to over 10 countries in the last year, where he has sampled the craft beer of them all."

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