With the end of another year fast approaching and another tax season close on its heels, it’s never too early to start thinking about your protecting your investments. Whether you’re just getting started on the revitalized real estate scene or you’re a seasoned veteran, these three tax tips are imperative to keeping your business – and your accounting system – running smoothly.

1. Organization is key. One of the most effective and simplified ways to keep your finances – and stress levels – organized and working in your favor is by hiring an experienced bookkeeper to handle the expenses and income of your real estate business. If at first that doesn’t seem like an option for you, try a digital accounting format like QuickBooks. Whichever way you go, you’ll need to make sure each bill, bank deposit and credit card transaction used for the business is documented, traceable and recorded for tax purposes.

2. Details matter. If you only have one property, it’s less overwhelming to track each expense and make sure they get properly labeled and organized. More than one, property, however, requires a little more attention to detail because you have to make sure each expense points to the corresponding property. Also make sure you track and log the mileage you use for your business for tax purposes.

3. Make Friends with 1031 Exchange. As a real estate investor, you have the luxury of using a tax savings known as 1031 Exchange. With this idea, you can defer the capital gains tax by moving the profits from the sale of one property directly into the purchase of a new one. This obviously saves you money as well as gives you the opportunity to pad your prosperity portfolio!

If you have any questions about these tips or would like to learn more about real estate taxes and financial planning, click here to schedule a time for us to talk.