How to Streamline Your Taxes This Season?Written By: mcsherryproper on March 7, 2021 Uncategorized
Property management companies, like other businesses, grapple with tax season to be as organized as possible. Rental management companies inevitably come across the complexities of properly filing taxes, making the process cumbersome.
Suppose your Belmont property management company or Lakewood property management has not improved your processes for streamlining taxes this season. In that case, this can result in human errors and affect the outcome for years to come.
What you need is to be able to create documentation and data in a streamlined and organized fashion. Everything has to be accurate and accessible, and tax season will be that much more bearable.
One of the greatest difficulties of house rental management companies and full-service property management companies is having to familiarize themselves with the tax season yearly and find out that new requirements have to be addressed fast. The right technology will certainly help all property management companies. If you want to be at ease that your property management company is adhering to tax requirements old and new, the annual tax season shouldn’t be that difficult at all. The right technology can also reduce the workload and make tax filings more accurate and easier. Below are some steps that will ensure that your tax data will be handled better and get better results during the tax season.
Data Consolidation is a Must
Everything you need must be in one system to handle all your data efficiently and accurately. Reduce the time spent hunting down paperwork and just rechecking if the information is correct in the first place. Robust software can handle all your essential tax documents and information on vendors and update these files year-round. When tax season finally comes, all the tax-related data you need will be available – no muss, no fuss. Using AppFolio can make document organization a piece of cake as you deal with the IRS. You can file your takes either through a paper form or electronically.
Property management services will function even better when there is one centralized system where all the backup documentation and files are kept. The software or platform will take care of automatically collecting and storing information throughout the year. Below is a checklist that you can use for staying organized:
- Put all instructions and forms in one place, organize them either physically or digitally.
- Bank accounts should be reconciled, all of them. Be sure to watch for inconsistencies, errors, missing entries, and other common issues in the transactions’ entries.
- 1099s should only be released or printed if the recipient’s information has already been confirmed.
- If you have 250 or fewer 1099s to submit to the IRS, the paper copies can be submitted instead. An additional 1096 must be generated. Always use fresh paper to print 1096s and make sure that all the lines are aligned properly.
- Year-end financials should certainly include accountant reports, purchase orders, vendor transactions, and other owner statements. Include any capital asset activities, mortgage interest, payments related to property taxes, and summaries of mortgage interest.
- Enforcing internal compliance is a must. Work with your IT team to make this happen.
- gov provides all present and updated changes to the US tax code. Consult with the website if you are not sure about all the new dedications and adjustments that have already expired.
- Explore the software you have and maximize its use. Ultimately, property management companies that use the best and most comprehensive software are the ones that spend less time in cleaning up or scrubbing their data and fixing broken or inaccurate records. When all your data is clean and updated, preparing the necessary documents is far easier. Additionally, accountants that use better software like AppFolio are more efficient than accountants stuck with data warehouses, manual records, and digital/physical spreadsheets.
Utilize Software Analytics to Spot Problems
The right property management platform would have zero issues keeping all tax-related documents and data organized. Analytics built into the most comprehensive software suites will help you detect errors and anomalies in transactions and other data entries. The anomalies can be as simple as incorrect zip codes or an additional digit in important codes like a tenant’s social security number. Anomalies in filing and reporting can result in audits, or worse, penalties that we’d all like to avoid. Property management software can be used to produce customized analytics and reports that will help you keep abreast of all the updated requirements for filing taxes this year so that all your data will be correct, complete, and, most importantly, clean.
File on Time
For the most part, property management companies need to file their 1099s by the end of January completely, then all the owner 1099s by February 28th. If you are filing electronically, you have up to March 31st. The filing process is simple, but it can sometimes be forgotten, so it would be best to stay organized.
Fortunately for people who already have property management software, you can file your 1099s more easily and on time, electronically. Software like AppFolio also supports the latest 1099-NEC form, which is used for reporting vendor earnings.
Free Up Time For Your Team
Tax season can be very disruptive, leading your team to work harder on areas that remove them from what they normally work on in your company. Manual data entry is tedious, and a spreadsheet can become error-ridden if much of the data is manually added.
With the right property management software working for your company, your team will be able to return to their actual duties and more important tasks that involve the day-to-day maintenance and improvement of your business. Furthermore, the right software can also update you on deductions that can help you save more money in the long term.
Get set up for success and breeze through the tax season with the right property management software in place.