Annual accounting for property is a specialist area. Naturally you are
keen to know that your taxation advisor is locking down every cent of
tax deduction that you are legally able to claim, and minimise your
You need to know that you have people that are ethical and well
regarded managing your affairs, so that you do not get audited
regularly by IRD (Some accountants have bad reputations with IRD)!
You need to know that you have the best advice, the best structures and
be supported in your investing decisions with good common sense advice,
from people that do it themselves and speak from experience.
1. Do you have all of the expenses in your rental return that are standard, including:
a. Accounting fees
b. Body corporate fees
c. Depreciation, including chattel valuations
e. Interest, including any interest borrowed outside of the property that might be deductible
f. Interest rate break cost fees incurred
g. Home office expense claim ( a percentage of your home
expenses, based on the ratio
of the size of your home office as a
percentage of your home)
h. Property management fees
i. Repairs and maintenance
k. Telecommunication costs, including 50% of your home line
and tools related to your
property, plus a potion of your mobile phones.
l. Travel costs to your vehicle.
m. Telecommunication costs related to your properties
n. Valuation fees, relating to financing
o. Vehicle expenses, by log book with shareholder
reimbursement for small investors, or
for larger property people by
direct vehicle ownership in the LTC with restrictive use
to eliminate fringe benefit tax obligations.
p. Water rates
While this list is not comprehensive for a passive investor, - it is a
good starting point and something you can be assured that GRA would be
looking at annually for you if we are managing your affairs.
Cashbooks & Annual Accounting Information - How Do We Collect Information From You ?
The process of providing your accountants the information they need at year end to do your tax, is simple and fast.
1. Firstly you need to fill in an Annual Client Questionnaire, - a
form on to which
you write down all of the things the accountant wants
to know like, did you
sell any assets or buy any assets during the
year, what are your cash
receipts and payments through out the year,
and what is your home office
claim going to be.
2. Secondly your accountant will want a cashbook ( if you have one) showing
cash received and cash paid.
At GRA we offer many ways for you to provide your cashbook information to us. Some of these are as follows:
* Manual systems, - give us a list of receipts and payments made by you and
we will collate them.
* A spreadsheet - the cheapest ( its free) and most
straightforward is we give
you a spreadsheet to fill in and you track
your receipts and payments
in it. Simply fill it in and email it too us.
* Xero - Xero is online accounting software designed to make bank reconciliations simple, provide real-time insightful reports, share access with your accountant and make managing your books a whole lot easier!
You can use Xero on any brand of computer and there is no software to download. You can login anytime , any whereon your Max, Windows, iPhone or Android. It's simple and smart. Bank feeds automatically import and categorise your latest banking, credit card and PayPal transactions and all you need to do is click OK to reconcile.
GRA is a Certified Xero Advisor
* Any accounting package you wish to use - we can read nearly all of them and
import their data.
Remember best practice is to make sure that all receipts and payments
related to business pass through the bank account that relates to that
business. This makes it easy to track and trace all business income and
expenditure, and makes sure you do not forget to report the expense or
income at year end.
I have just attended the property school and just want to say it was really a worthwhile experience doing it especially for me who is planning to start as an investor (or trader). Thanks again for sharing your invaluable knowledge.
P.S. Have also told my friends/colleagues, who are also interested on property, to attend the next property seminar.
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