If you are like most successful vacation rental owners, tax day means sending a check rather than receiving a refund, which also means that we’re the least likely to send our tax returns in January.
Over the past few weeks, I have spent a considerable amount of time gathering information to send to my accountant so she can do my taxes. After several years of being a vacation rental owner, I pretty much have the process down to a science. But the only thing we have not figured out is how to do it quickly!
After I am done sending all the spreadsheets to our accountant, I also take this opportunity to look at my bills and see if there are any places where I can cut some corners. And I also make it a point to set up schedules and budgets for maintenance and capital improvements for the current year.
While looking at my bills for one of my properties, I noticed that my power bill increased significantly over the prior year. I also noticed I had three service calls for in 2010 for the air conditioner and one already in 2011. The HVAC system is over ten years old. I called my HVAC guy and talked to him about it. He said the unit could last another couple of months or even years but it was definitely nearing the end of its life. I decided to go ahead and replace the HVAC system now rather than chance it. This will accomplish three things: it should lower my power bill, since the new one is much more energy efficient, it takes care of necessary capital improvements for 2011 taxes and it is preventative maintenance.
I also looked at my cable, internet and phone charges for some of my older properties. I tend to do my research when first setting up all the services, getting the best rates, but after everything is in place, I just pay the bills and never think about it again. Now days, many companies offer bundled services—one rate if you use the same company for everything. So I called the cable company and I ended up saving $80 per month with one of my properties and $60 per month for another property that’s a savings of nearly $1700 per year!
One quick reminder for all the vacation rental owners who filed and received compensation for the BP and/or GCCF loss of income claims: You are required to claim any money you received from your claim. You should have gotten a 1099 for all payments but even if you didn’t, you still should claim that income.
If you still have not filed your taxes, you have one week from today to do so—taxes must be post marked by April 18, 2011. Be sure to check out the list of deductions that you can take for your vacation rental property here.