Just like your birthday, Uncle Sam comes calling every year. For most people, especially real estate agents, filing your taxes every year is not a viewed as a celebration. Taxes are stressful and overwhelming for many real estate agents. It doesn’t have to be that way. Having a good system and the right team of professionals assembled can take the stress away from tax filing season.
Unfortunately, they don’t cover this in your real estate licensing classes so most agents don’t know where to start. At Kim Hughes & Company, we have a bookkeeping system designed specifically for real estate agents that will put you in control of your money with monthly expense tracking and reporting to prepare you for your taxes and help you plan for the future of your business.
Here are some things you must do to be prepared to file your taxes come April 15th.
- Collect income statements from all income sources.
- Collect statements of deductions such as mortgage interest, childcare expenses, etc.
- Hire an experienced accountant that knows the tax laws relevant to the real estate industry.
- Organize your receipts as you go through the year so that you can find what you need quickly at the end of the year and the expenses are organized for you to save them in case you need them down the road.
- Total your deductible expenses by category so that you can provide them to your accountant.
The last item is the one that is hardest for most real estate agents and the one that causes most of your stress. Like any part of your business, having a system in place is the best way to be successful. How do you categorize your expenses? Without a solid system for tracking, expenses will slip through the cracks and the more you miss, the more of your money you will have to give away on April 15th.
Do you have a list of real estate related expenses that you track for tax purposes? Without a list of what to track, it is hard to get started. Once you know what to track, now it’s time to put everything together. Spreadsheets, accounting software, lists of expenses, envelopes for each category of expenses…there are lots of different ways you can put your expenses together.
If you keep up with this on a monthly basis, you can probably accomplish this relatively easy but do you take the time to sit down monthly and review income and expenses so you are prepared for tax time, know where your money is going and can plan for your long term real estate and financial goals?
You may not be doing this because you aren’t sure where to start or maybe because you are selling houses instead. Whatever the reason, it can’t be ignored. This is a critical piece of your business. If you aren’t managing this piece of your business and have no idea where your money goes each month, contact me today.
Kim Hughes and Company offers today’s real estate agent a place where they can come for assistance is all areas of their business. From systems, marketing, social media, websites, bookkeeping or business coaching. Call Kim today at 903-569-6763 or email to schedule a private consultation on how you can take your business to a new level.