Landlord Accounting and Bookkeeping Services

Landlord Accounting & Bookkeeping Services

Whether you own 5 doors, 20 doors or 200 doors, you likely don’t have time to chase receipts, reconcile escrow, and guess on repairs vs. improvements.
I’m Bryan Martin, CPA. My team and I run real estate–first books that flow straight into smart tax planning, so you keep more cash and sleep better at night.

Schedule a free 30-minute strategy session →

Why Landlords Need Specialized Accounting

Rental finances aren’t “just bookkeeping.” Rent rolls, security deposits, lender escrows, depreciation, and mixed-use expenses make landlord accounting different from a typical small business. Treat it like generic books and you leave deductions—and protection—on the table.

Common mistakes we fix:

• Capitalization vs. expense classification: Landlords often deduct big-ticket repairs (like roofs, HVAC, flooring) as expenses when they should be capitalized and depreciated—or vice versa—causing misstated income and potential IRS adjustments.

• Schedule E grouping errors: Many filers lump all properties together instead of reporting property-level details, which hides underperforming assets and breaks basis tracking.

• Missed travel, mileage, and home-office deductions: Landlords skip these entirely or track them poorly, losing hundreds to thousands annually in legitimate write-offs.

• Escrow and mortgage tracking issues: Property tax and insurance payments made from escrow aren’t recorded correctly, leaving your books out of sync with actual cash flow and overstating expenses.

• Security deposit liability confusion: Deposits get treated as income when received, triggering premature tax recognition that later must be reversed.

• Depreciation oversight: Assets are placed in service late, not separated between land/building, or depreciated over the wrong life (27.5 vs. 39 years).

Accurate books reduce audit risk, simplify lending, and let you plan taxes proactively—not react in March.
Learn more in Schedule E Explained.

Our Bookkeeping Process (Built for Rental Properties)

We manage your rental accounting monthly—property by property—inside QuickBooks Online with a clean chart of accounts that mirrors how landlords actually think.

Monthly workflow

• Bank and credit card reconciliation: Every month we match transactions to ensure rent deposits, loan payments, and expenses align with statements.

• Rent-roll tie-out: Your rent roll is verified against actual deposits to catch late or missing payments immediately.

• Mortgage & escrow tracking: We break out principal, interest, taxes, and insurance accurately so your balance sheet stays clean.

• Security deposit tracking: Deposits are recorded as liabilities, not income, to prevent false profit reporting.

• Property-level profit and loss: Each property gets its own mini P&L to isolate cash flow performance.

• CapEx ledger management: Renovations, appliance purchases, and improvements are logged for depreciation scheduling later.

• Month-end close summary: We flag any anomalies (negative rents, duplicate expenses, uncategorized items) before they snowball into year-end issues.

Deliverables you receive

• Monthly or quarterly financial statements: Professionally formatted Balance Sheet and Income Statement, ready for tax prep or lending.

• Property-level performance summaries: Each unit or address shows rent collected, expenses, vacancy, and net operating income (NOI).

• Quarterly tax estimate support: When included in your package, we project estimated payments based on your actual year-to-date results.

• Year-end tax package: A clean set of books mapped line-by-line to Schedule E for effortless tax filing.  Taxstra will handle this on your tax return when you prepare your return with Taxstra so you don't have to work with two separate accounting firms!

Everything flows through our secure client portal—no messy spreadsheets or lost receipts.

Tax-Ready Financials & Deduction Optimization

Clean books are step one. Step two is turning them into tax savings.
We align your chart of accounts with deduction buckets and depreciation schedules so there’s zero guesswork at filing.

What we optimize

• Repairs vs. improvements: We apply safe harbor and de minimis rules to legally expense more and capitalize less when allowed.

• Depreciation schedules: Buildings, improvements, appliances, and land are broken out correctly to maximize annual deductions.

• Cost segregation readiness: For larger landlords, we flag assets suitable for cost-seg studies to accelerate depreciation.

• Travel, meals & home-office deductions: We ensure each is tracked with mileage logs, dates, and documentation to survive audit scrutiny.

• Passive-loss carryover tracking: We maintain your suspended losses so they’re not forgotten (and wasted) across years.

• Tax elections & method statements: We prepare the right elections (e.g., 266, 3115) so IRS positions are clear and defensible.

When your books already reflect the tax story, your return prep is faster, cheaper, and more accurate.
Read our guide on Cost Segregation Studies.

Choosing the Right Entity Structure for Your Rentals

LLC? Partnership? S-Corp? The right answer depends on financing, partners, and whether you run short-term rentals.  We walk you through liability protection, QBI, and passive-loss rules—then build a structure you can actually manage.

Overview of Entity Options

• Single-member LLC: Simple structure that offers liability protection but passes all income to your personal return (Schedule E). Great for most solo landlords.

• Multi-member LLC / Partnership: Allows multiple owners, flexible allocations, and shared expenses; files Form 1065 and provides K-1s.

• S-Corporation: Typically used for active operations like property management or STRs—not ideal for long-term holds due to QBI limitations and payroll requirements.

• Series LLC (in select states): Can provide separation of liability between properties under one master LLC structure.

• Trust or Holding Company Setup: For landlords expanding across states or generations, can streamline liability and estate planning.

Advanced Considerations

• QBI Deduction & UBIA: We identify when your rental qualifies for the 20% qualified business income deduction and track eligible unadjusted basis (UBIA).

• Grouping elections: When you own multiple rentals, grouping under Reg. §1.469-9 can convert passive losses into active participation, if done right.

• STR material participation tests: For short-term rentals, we calculate hours and activities to meet non-passive status (100-hour rule or “more than anyone else” test).

• Liability layering: We help you determine when multiple LLCs or insurance coverage gives better ROI than overcomplicating your structure.

• Exit and 1031 considerations: Proper structure impacts how easily you can exchange, sell, or refi later.

Learn more: Real Estate Professional Status

Discuss your entity structure → Schedule Call

Rental Property Tax Preparation & Planning

We prepare landlord returns that hold up: property-level Schedule E, passive-activity tracking, and depreciation that reconciles to your books.

What We Cover (Tax Prep & Planning)

• Schedule E reporting: Each property’s income, expenses, and depreciation reported separately to show true profitability.

• Passive-loss limits: We track suspended losses annually and ensure proper carryover to future returns.

• Repairs and safe-harbor elections: Implemented proactively to lock in consistent treatment and minimize red flags.

• Depreciation & basis adjustments: Updated for cost-seg studies, disposals, and capital improvements.

• Quarterly tax projections: Ongoing estimates to prevent surprises and avoid IRS underpayment penalties.

• State-specific filing compliance: Multi-state landlords get allocated income and filings handled for each jurisdiction.

Operate short-term rentals? You may qualify for unique rules—see our Short-Term Rental Loophole.

Audit Defense & Tax Resolution

Notices happen. We respond, correct, and defend.  The best defense is tight books and documentation that matches your return.

Learn more about Audit Representation.

What You Get With Taxstra

Built for Landlords - What makes us different than your Dad's CPA

• 100% U.S.-based CPAs and bookkeepers: Every account is handled domestically by real estate–trained professionals.

• Flat-fee pricing: Transparent monthly or annual fees with no hourly surprises.

• Automation + client portal: Secure uploads, task reminders, and document storage all in one login.

• Experience with STR, MTR, and LTR models: We understand Airbnbs, mid-term rentals, and traditional long-term leases.

• Book cleanup and migration: We fix messy QuickBooks files and migrate you from spreadsheets or other software.

• Integration with property management systems: We can sync with tools like AppFolio, Buildium, or Stessa for seamless data flow.

• Unlimited Q&A: Ask tax and bookkeeping questions year-round without racking up billable hours.

Schedule Your Free Initial Consultation

Get clear books, a tax roadmap, and real answers on entity setup and deductions.
Based in Springfield, IL, serving landlords nationwide.

Book My Strategy Session →

How Landlords Track Rental Income & Expenses

Use separate bank accounts per entity, tag each transaction to a property, and label CapEx vs. OpEx as you go.

Your financial stack should flow like this:

1. Rent Roll → Bank Deposits (Income Verification)
   Track rent on a detailed rent roll that shows billed vs. collected. Each month, tie those numbers directly to deposits on your bank statement. This catches missed payments, partial payments, and double deposits before they distort your income.

2. Operating Expenses → Categorized by Property
   Every expense—utilities, cleaning, maintenance, property management fees—should be coded to the correct property and expense category. This turns a jumbled list of charges into clear property-level P&Ls and ensures you don’t miss deductions.

3. Capital Expenditures (CapEx) → Logged in a Separate Ledger
   Big-ticket improvements like roofs, HVAC units, flooring, or appliances shouldn’t mix with repairs. Keep them in a CapEx ledger. Each project is tagged with a date, amount, and description so it can be depreciated correctly later (or used for cost segregation).

4. Tax Plan → Elections and Strategy Before Year-End
   Don’t wait until tax season to plan. Mid-year, use your books to project income, model depreciation, and evaluate strategies like grouping elections, cost segregation, or material participation tests. Tax savings come from proactive—not reactive—decisions.

5. Wealth Growth → Refi, Acquisition, and Exit Decisions Backed by Real Numbers
   With clean financials, you can confidently approach lenders, compare NOI across properties, and decide when to refi or sell. Your books become your blueprint for scaling—guiding every purchase, rehab, and hold decision with accurate data.

FAQ: Landlord Accounting & Bookkeeping

What records should landlords keep for taxes?
Bank statements, rent roll, leases, mortgage 1098s, escrow analyses, invoices/receipts, mileage logs, and CapEx ledger. We’ll show you an easy folder system inside the portal.

Should I form an LLC for each property?
Depends on financing, partners, and risk. Many use a holding LLC with titled LLCs for select assets. We’ll map your options during the call, but will not be able to discuss the liability side.  That will need to be discussed with your attorney.

How do you track property depreciation?
We build a fixed-asset subledger for each property in our tax software UltraTax CS—building, land improvements, appliances, roof, HVAC—so acceleration is easy later.

Can you help with short-term rentals?
Yes. We handle STR bookkeeping (Airbnb, cleaning fees, occupancy taxes) and apply the specific tax rules.
See Short-Term Rental Loophole.

Helpful Resources

• Real-Estate Investor Hub

• Schedule E Explained

• Cost Segregation Studies

• Real Estate Professional Status

• Audit Representation

• IRS Publication 527 – Residential Rental Property
  
  

Ready to Stop Guessing and Start Optimizing?

Let’s get your rentals on clean books and a smart tax plan.

Schedule a 30-Minute Strategy Call →

Disclaimer: This page is for general education and not tax or legal advice. Engage Taxstra for guidance specific to your situation.