Audit Proof Your Rental Properties

Has your rental property come under scrutiny by the IRS? Are they interested in your accounting for your rentals? Have you considered “audit-proofing” your rental properties? You do it to your home when you bring young children in; you just call it “baby-proofing.” You make your home safe for both you and your child. Isn’t it time for you to do the same for your rental property?

When the IRS comes calling to inspect your books concerning your rental properties, it is usually too late to “audit-proof” your properties. The time to start is when you first acquire the new property.

• New Bank Account
• Online Banking & Bill Pay
• Using a scanner to keep track of your receipts and  invoices.
• Keep a log book of time spent on your rental properties.
• Be sure to make a loan your rental business if necessary, not just transfer money from another account.
• Always treat your rental as a business.

To keep the IRS uninterested in you, you need to make sure that you look like a business. Keep clean books, have separate bank accounts, and make sure you keep accurate records of repairs. Keep those receipts. “Audit-proof” your rental property just as you would “baby-proof” your home, it just might keep both you and your property a little bit safer.Should you have any questions about how to “audit-proof” your rental properties, please call Next Level Accounting & Tax at (916) 960-9800