Prepare for Tax Season as a Real Estate Investor in Houston

Prepare for Tax Season as a Real Estate Investor in Houston

As a real estate investor in Houston, dotting your I’s and crossing your T’s is essential. You want to be sure you have prepared for tax season by saving receipts, tracking expenses, logging depreciation, and logging rent. To do otherwise could leave you frustrated or anxious as you work through your tax forms.

Even if you already have a software program to help with taxes, you need to do a few things to prepare. As a real estate investor, consider doing the following for the best results.

Track Expenses

The worst thing you can do is fall behind on scanning receipts and entering expenses through the year. Before you meet with an accountant, catch up on all these things and have your files ready. If you’re running out of time, there are apps to help you scan receipts in a snap.

Some deductions to be aware of as a real estate investor include:

  • Amortization and depreciation
  • Maintenance and repairs
  • Advertisement of buildings, apartments, or condos

Look through your activity from the year to see if you’ve missed any write-offs. Account for all the expenses you can add to cut down on taxes as much as possible.

Prepare for Tax Season as a Real Estate Investor in Houston

Compile Documents

You need to have documentation to back up what you sent to the IRS. Nobody wants an audit, but it’s always possible, so be prepared. As a real estate investor in Houston, make sure you have all of the following available for potential use:

  • Closing statements for properties
  • 1098 mortgage interest statements
  • Escrow statements regarding insurance and property taxes
  • Insurance and property tax statements
  • Schedule of capital improvements
  • Statements from maintenance companies
  • Square footage of your home office and related expenses
  • Investment losses and gains

Be Aware of Filing Dates

Missing a date as a real estate investor may mean paying more, so stay up to date. If you owe taxes, interest will be levied on the balance until it is paid. For individuals, the deadline is April 15th, while partnerships have until March 15th. Your accountant can help you with other dates you need to know.

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