Keeping Financial Records

Filing taxes should be considered an illegal form of torture. It seems to just get worse and worse every year. I spent years struggling to file them myself and I was never sure that I did them correctly. Since I have switched over to professional accountants, I have never been happier.

I have been trying to keep close track of all of the expenses that we have had for this property, because we will need to file soon. I wanted to make sure that I was organized ahead of the game to save time. Of course, the accountant will be filing for us, but we are the ones that will be supplying him with all of the numbers that he needs. We used this same accountant for the past few years. When we were filing last year, and knew then that we would be buying an investment, I should have asked him how he wanted the information organized. I have it all in a excel file now, so sorting it into different views will be relatively easy. I know a lot of people use Quicken, or other similar software, but I have never found the need. A few spreadsheets have been easy enough to set up to keep all of the records that I have.

I have one spreadsheet for expenses that are not directly related to the property that we bought, but that we still might be able to use as a deduction. There are phone and internet expenses, FedEx bills for some of the bidding and closing paperwork that we needed to send overnight, and just some general office supplies. I do not yet know how much of these things we can use as deductions, but I have them all on my list anyway.

Then I have a sheet for the expenses that directly relate to the property in Dallas. On this sheet I have separated the closing costs from the operating costs. Linked to this sheet is one for the income the property generates. I have it broken down by apartment numbers, that I transferred from the monthly statements from the property managers. But I also just have the monthly totals that then are linked back to the operating costs page to give a running total of the profits.

Once we meet with our accountant I will know how good or bad my record keeping has been. Then I will come back and share any insights into better record keeping.