Tracking Expenses
I just purchased a property and did a remodel job than ran about $8000. Most of that was materials such as paint, flooring, light fixtures etc. and some of it was tools (maybe 1000) And also appliances (1000).
Im under the impression that rental expenses have to be divided into items that must be depreciated and items where the entire deduction can be taken immediately. so when tax time rolls around next year and I have to put in my expenses it is going to be a big pain if I have to sort through a bunch of reciepts for hundreds of dollars each and figure out which items are tools and which are maintenance.(things that depreciate and things that dont)
Basically Im looking for advice on the best way to track these expenses and any others that come up with my properties. And any suggestions on good books regarding taxes and rental properties would be much appreciated.
Thanks for the help
-Josh
[ Edited by JSterling20 on Date 04/09/2010 ]
quicken and quick book are pretty easy for tracking that and all for transfer into the tax software at years end.
Thanks for the tips. I found IRS publication 527 to be very helpful. I will try to divide up my expenses by depreciable life (5 yr, 7 yr, 15 yr, and 27.5 yr). I purchased the property in feb. 2010 and placed it into service in april 2010 and all of the expenses occured during that time. I have about $8000 spread over 50+ reciepts some of which have 30-40 items each, To go through each item on each reciept and figure which property class it falls into seems a little tedious. Is there a better way to do this?