Dispitus.com

Empowering change empowering Tech

Operating rental properties, and especially a portfolio of rental properties, can result in skyrocketing charges for accounting and legal fees. Managing these costs, supporting your needs the right way, protecting the interests of your investors, protecting yourself from liability is a tremendously challenging requirement that requires understanding where you can “self-serve” and how you can achieve this end while maintaining the bar for service quality as low as possible. high enough. for all involved. Turbo Tax Small Business is one of these solutions.

Making Turbo Tax sufficient without significant accounting support requires good planning. First, as I mentioned before, a good accounting system that records all transactions before entering them into the property’s accounting and management system is a great start. If each transaction is recorded with the date, a detailed purpose and the type. Your books can be quickly assembled by yourself if you have the accounting skills and understand or take the trouble to understand your software well enough.

With a detailed and accurate income statement, balance sheet, and cash flow statement, you have the basic information you need for the financial input of your tax preparation.

Next, you need to have all of the entity’s information at your fingertips. For tax preparation, this includes the entity’s tax identification number or EIN. You need to know your entity type. You should be prepared to answer questions such as whether it is an S Corporation or Limited Liability Company (LLC) or partnership. You must be able to answer whether the company is a sole partner or investor or a multi-partner or investor business. Lastly, you have the date of incorporation of the entity.

For states, you’ll need to know similar information, and states have state-specific entity information that you’ll need to have.

Next, you should have the investor’s tax information. This is simply the name of the entity or individual. Your tax identification number. (If you have foreign investors, you must have a tax ID and if you don’t, it is a process for them to apply to the IRS for an ID. You will need your address and a copy of your passport. They will need to fill out the W7 for this purpose). Then you will need the address of each individual.

With all this information in hand, you have everything you need to complete your taxes. As a matter of organization, you will need to have the investment date and subsequent investments for each investor. You will need the same for distributions. Once organized, and assuming you have (or the person who did the work has) accounting experience, you can prepare an accurate tax return that will satisfy the IRS, your partners, and protect everyone’s interest.

Leave a Reply

Your email address will not be published. Required fields are marked *