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How to Prepare Your Cary NC Rental for Tax Reporting

Posted by Phoenix Property Management on November 17, 2016
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Today, we are talking about how to prepare for tax reporting. As a property investor or a rental property owner, you have an asset that has been producing and generating income. You’ll need to report that income when you file your taxes.

Every year, we send out a 1099 form before the end of January. When you receive this form, you can look at Box 1, which documents the total rental income that you received for your property. That number is what we call the revenue number.

The other numbers you need to collect are the expenses associated with your rental property. Many of those expenses are documented in our profit and loss statement. We provide that to you at the end of the year as well and it reflects the payment obligations, or the total amount of money that you spent on that real estate asset. As the owner, you can log into your portal and print out the profit and loss statement for the year. If you look at the right column, you will see the annual total. Some of the costs included in this total might include the tax bill that’s paid on the property, any repairs or maintenance that are paid, and also things like HOA fees, management fees and any other expenses we incur on your behalf. You can report those costs and deduct them from your taxes.

The purpose of this video is not to replace your accountant or CPA at tax time. Hopefully, this will help you prepare for the meeting with your accountant, because those are the numbers your tax professional will be asking for as your return is prepared.

If you have any questions about the forms we provide, or you’d like to talk about this further, please contact us at Phoenix Realty and Property Management.