As a small business owner myself, I understand that your desk is probably swamped with a mile high stack of papers. If you have rental properties, you may have work orders, receipts, invoices, and an endless supply of junk mail. I always emphasize following a process to organize your financial records. There is so much to do at the end of the year but your desk would greatly appreciate a nice shape up before the start of the next year. Get your financial statements in order so you can file your returns early and enjoy the springtime.
What do I need to keep?
You should keep all records related to your rental activities, including the rent and repair documents. Repair documents include: subcontractor bills, work order requests, and receipts from capital improvement supply purchases.
Some business expenses can be deductible but you need proof of purchase to legitimize the expense. Keep receipts, bills, and canceled
checks in a large envelope or Ziploc. Organize the receipts by month if possible to you can easily find records.
Why should I keep records?
In the event that the IRS decides to audit your business and you don’t have the records, you might not receive the deductible for applicable
Also these records help you file tax returns easily. If entered into QuickBooks in a timely fashion, you can view the financial statements without heavy calculations.
A little bit of record keeping a day keeps the IRS away!