For experienced property managers like Martin Feinberg, January means one thing: Tax Season.
For many rental property owners tax season brings on an added measure of stress, and some choose to utilize property management companies specifically so they don’t have to worry about the taxes that are associated with having tenants and using vendors throughout the year. While many rental property owners dread this time of year, professional property managers understand that it doesn’t have to be a stressful month if they are prepared.
Property management businesses can be complex and therefore filing, even for experienced landlords, can be a complicated process. Outdated procedures and/or paper records can make it even worse. It should be the goal of every property manager to begin tax season with all of their data and documentation organized, accurate, and easy to find.
This typically means using the right technology and software to reduce the amount of work, stress, and even liability in the case of an audit. Below are a few ways that property managers can make tax season as easy as possible:
- Consolidate Data: The right property management software will store tax information, vendor material, and everything in between in one easy-to-access-and-update place. This means that when tax season arrives everything a property manager needs to do their taxes will be at their fingertips.
- Use Software to Find Errors: The right property management software doesn’t just store information in one place. It can also make it easier for landlords to find errors within that information, such as an incorrect zip code or extra digit in a social security number. Such mistakes can cause delays, audits, and/or penalty fees.
- Embrace Electronic 1099s: Property managers usually have to provide 1099s to their owners, vendors, and the IRS by January 31st. This process is often stressful and time consuming and occasionally can even fall through the cracks completely. The right software can enable managers to send 1099s to vendors and owners electronically instead of by mail, making the entire process quicker and simpler.
In the end, the property managers that choose to utilize technological solutions to the tax process are often the most successful. Property management software helps to keep important information and documents easy to find, accurate, and ready for a quick and easy tax season.
