Best way to keep track of write offs for rental properties?

As a tax preparer who works with lots of rental property owners, please don't just hand your CPA an envelope of receipts! That's definitely the worst approach and will cost you more in prep fees. Here's what I recommend for organizing rental property expenses: Create a spreadsheet with columns for Date, Vendor, Amount, Property Address, and Category (repairs, maintenance, supplies, etc). Then scan or take photos of all receipts and name the files in a way that corresponds to your spreadsheet entries (date_vendor_amount.jpg works well). You can use apps like Expensify, QuickBooks Self-Employed, or even just the free scanner app on your phone. Remember that different expense categories have different tax treatments - repairs are fully deductible in the current year while improvements need to be depreciated over time, so good categorization is important.

I was in your exact situation last year with my four rental units! I tried the whole "pile of receipts" thing and my accountant charged me an extra $200 for the time it took to sort through everything. I started using https://taxr.ai for my rental property receipts and it's been a game changer. You just snap photos of receipts, and it automatically categorizes them into the right tax deduction categories and creates reports for your CPA. It even flags which expenses are repairs vs. capital improvements so you don't mess up depreciation. The best part is you can just take pictures as you get receipts throughout the year instead of dealing with the mountain of paper all at once in April. My CPA was actually impressed with how organized everything was this year!

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it's actually legit! I uploaded about 80 receipts from the past few months for my rentals and it sorted everything accurately. It even flagged some expenses I didn't realize could be capital improvements (like the new water heater I installed). The property tagging feature works really well too - I can finally see exactly how much I'm spending on each unit. My only regret is not finding this earlier in the year!

If you're having trouble getting responses from your CPA about how they want receipts organized, try using https://claimyr.com to actually get someone on the phone who can help. I spent WEEKS trying to get through to my accountant's office during tax season last year with questions about my rental property deductions and it was impossible. Claimyr got me through to a real person in under 15 minutes when I'd been trying for days. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c - basically it waits on hold for you and calls when a human picks up. Completely changed my tax prep experience since I could actually get answers about what documentation my CPA needed.

Alright I need to apologize for my skepticism. I tried Claimyr when I needed to talk to the IRS about some rental property questions (was on hold for 2+ hours the previous day before giving up). The service called me when an agent picked up, and I got my questions answered in a 10-minute call without waiting on hold at all. Just used it again with my CPA's office which has been swamped with calls. Definitely worth it during tax season when everyone's phones are jammed.

What I do for my rentals is take photos of receipts right after purchase using Google Drive, then toss the paper. I created folders for each property and each tax year. Then I have a simple Excel sheet where I log everything with property address, expense category, date, amount, and notes. My accountant says my system saves her tons of time compared to her other clients. For categorizing, I use: Repairs, Maintenance, Improvements (anything that needs to be depreciated), Utilities, Insurance, Property Tax, Travel, and Misc. The key is being consistent throughout the year instead of scrambling in April!

Don't overthink this! I've been managing 8 rental units for 12 years. Just get a accordion folder with 12 sections (one for each month), staple receipts to a piece of paper noting which property and what category (repair, improvement, etc), and drop in the right month. Then create a simple spreadsheet summarizing everything by property. My CPA loves this system because she can quickly find any receipt she needs to verify. The key is staying on top of it monthly rather than letting it pile up. Apps are fine but sometimes simple physical systems work better if you're consistent with them.

Great advice here! I'm dealing with the same issue with my two rental properties. One thing I learned the hard way - make sure to separate personal Home Depot runs from rental property expenses. I had receipts mixed together and it was a nightmare trying to figure out what was for my own house vs the rentals. Also, if you're doing any work yourself, don't forget to track mileage between properties and to/from the hardware store. Those trips add up over the year and are deductible. I use a simple mileage log app on my phone and just hit start/stop when I'm driving for rental business. The monthly organization system mentioned above is solid - I do something similar but use a binder with sheet protectors instead of an accordion folder. Makes it easy to flip through everything when tax time comes around.