A number of people use a good bookkeeper who can do the following well and at much lower fees than a CPA. Use Quicken or (even better) QuickBooks to summarize your receipts, deposits and expenses from your checkbook and bank statements.
· Set up rental property expense categories according to the deduction line items on the IRS rental property schedules, such as Schedule E; or on the highly preferred, lesser-audited partnership form 1065 (along with backup form 8825).
· Assist you with recordkeeping and management systems that pertain to real estate. There are a number of excellent recordkeeping programs that are specifically targeted for real estate recordkeeping, and save a lot of time and accounting fees. Once set up, these programs are fairly easy to use for you or your bookkeeper. See next for recommendations.
· Assist you with property management. A good bookkeeper could also be a competent clerical assistant who could help with property management functions, such as taking tenant applications, typing leases, work orders and other internal management documents. But it is imperative that they abide by federal and state rules of fair housing, which you should inform them, including having a management systems manual. There are excellent property management programs out there. For the best, see Jeffrey Taylor, www.Mrlandlord.com, or Mike Butler www.mikebutler.com.
· Prepare and send 1099s to independent contractors. There are excellent computer programs that the bookkeeper can use to do this.
· Assist you with tax preparation using a tax preparation computer program. A lot of the work done by CPAs is "line-by-line form filing," but they charge higher "CPA" prices. There are easy-to-use tax-preparation computer programs (such as TurboTax or TaxCut) where your bookkeeper can assist you in the preparation of your taxes. In addition to 1040s, there are tax-preparation computer programs for partnerships and corporations. These programs get better all the time.
TIP 1: Before having a bookkeeper assist you with tax return preparation, you could first engage a competent CPA to do a one-time set up and preparation of your tax return in accordance with the Renaissance Goldmine strategies. Once set up, it will be much easier for the completion of your tax returns for later years. You then have could have the CPA review the returns every three years. If changes need to made, returns could be amended back three years for refunds.
TIP 2: There are also very competent bookkeepers who can do your entire tax return for you, do a great job and save you a bundle of fees. Just make certain they do it in accordance with the Renaissance Goldmine strategies (www.GoldmineSavesTaxes.com).
What a Bookkeeper Should Not Do For You: Internal Accounting Controls! In NO way should a bookkeeper handle cash or checks (money). This includes making up of deposit slips, taking deposits to the back, handling cash, signing checks ... NO signature stamps!