NEWSLETTER

January 2025 | Issue No. 30

Maximize Your Tax Savings as a Property Owner

As tax season approaches, it’s essential to stay organized and make the most of your investment property’s tax advantages. PropertyWize is here to guide you through the season with important updates on tax documents, maximizing savings, and how we can support your financial goals.

What to Expect for Tax Returns

1. 1099-MISC Forms:

For owners who earned over $600 in rental income, PropertyWize will electronically file your 1099-MISC form. A copy will be sent to you via email directly from Buildium.

• Delivery Method: Forms are distributed electronically with the subject line:

“IMPORTANT TAX RETURN DOCUMENT AVAILABLE” from mail@onlineformretrieval.com.

• Delivery Deadline: Expect this email by January 31, 2025.

2. Expense Reports:

PropertyWize does not automatically issue expense reports. However, you can easily access and download your reports through your Buildium rental portal. If you’d like us to send your expense report directly, please submit a request through your rental portal.

Step-by-Step Guide:

1. Log in to your Buildium Owner Portal.

2. Navigate to the Reports menu.

3. Click on the Rental Owner Statement link.

4. Select your report parameters:

Parameter: What It Means

• Properties: Choose a specific property, association, or group of properties.
• Date Range: Set the time frame for the report.
• Statement Message: Add a custom message to appear on the report.
• Contents
  • - Income Statement: Summary of income and expenses.  
  • - Transaction Details: Line-by-line financial details.
• Layout: Select Portrait or Landscape orientation.
• Include Inactive Properties: Option to include properties no longer active.
• Report: Format Choose from PDF, legacy PDF, XLS, XLSX, or CSV.

5. Click Download Report to save it to your device.

How PropertyWize Helps You Maximize Tax Savings

At PropertyWize, we’re dedicated to helping you get the most out of your investment. Here are some key services we provide and recommendations we can make to help you maximize your tax savings:

• Organized Recordkeeping: PropertyWize ensures that all income and expense records are accurately tracked in Buildium. This makes it easy for you to access detailed reports for tax preparation. Need assistance pulling reports? Submit a request through your owner portal, and we’ll send them to you.

• Automated Expense Tracking: Our management system, Buildium, automatically tracks all income and expenses, helping you stay organized and ready for tax season without lifting a finger.

• Proactive Property Maintenance: We coordinate routine maintenance and necessary repairs to prevent costly issues. These maintenance costs are tax-deductible, and we can provide maintenance history upon request.

• Bundled Property Services: For clients with multiple properties, PropertyWize can help coordinate bundled services (landscaping, cleaning, pest control, etc.) to lower costs and maximize deductions. Ask us how we can streamline these services for you!

• Recommendations for Energy-Efficient Upgrades: We can connect you with trusted contractors for energy-efficient property upgrades, which may qualify for valuable tax credits. Reach out for recommendations!

• Capital Improvement Planning: PropertyWize offers guidance on scheduling major upgrades and renovations to help balance expenses and maximize annual deductions. Let us help you prioritize projects for the best return on investment.

Investing in real estate offers advantages beyond cash flow:

• Passive Income with Tax Breaks: Rental income can often be offset by expenses and depreciation.

• Appreciation with Lower Capital Gains Tax: Long-term property appreciation is taxed more favorably.

• 1031 Exchange: Defer capital gains taxes when exchanging one investment property for another.

• Asset Growth: Tax savings allow for reinvestment and portfolio expansion.

Forming an LLC can offer liability protection and potential tax benefits. Here’s how to get started:

Step 1: Choose an LLC Name and verify its availability on the Maryland Business Express portal.

Step 2: File Articles of Organization with the Maryland Department of Assessments and Taxation (SDAT) online or by mail.

Step 3: Obtain an EIN (Employer Identification Number) from the IRS for tax reporting.

Step 4: Draft an Operating Agreement to outline LLC operations.

Step 5: Transfer the Property Title to the LLC by filing a new deed (may involve transfer and recordation taxes).

Step 6: Notify Your Lender if the property has a mortgage, as approval may be required.

Step 7: Update Insurance Policies to list the LLC as the property owner.

• Electronic Tax Documents: Timely 1099-MISC forms delivered via Buildium.

• Self-Service Reporting: Easy access to detailed expense reports via the owner portal.

• Best Practices Guidance: Insights from successful property owners and industry experts.

• Investment Support: Tools and resources to help protect and grow your real estate portfolio.

• January 31, 2025: 1099-MISC forms emailed to property owners.

• April 15, 2025: Federal tax filing deadline.

Let’s Make 2025 a Profitable Year!

PropertyWize Maintenance Program

We would like to remind you about our comprehensive Maintenance Program, designed to preserve and enhance the value of your investment.

Our Maintenance Program offers various options tailored to your needs, allowing you to choose the level of service that best fits your property and budget.

By participating in our Maintenance Program, you help ensure a well-maintained property, satisfied tenants, and reduced turnover. For more details, please refer to our Maintenance Program Guide.

Running the rental owner statement report is very important in determining the amount of your available disbursement payment. The rental owner statement will show you all the transactions affecting the owner’s available cash. It is a great place to find missing or incorrect transactions on your rental property that will cause inaccurate information. 

• Check the property beginning balance. At times, changes to past transactions can affect the owner’s running available for payment balance. Running a rental owner statement with a prior start date will help you find discrepancies. 

• Run the rental owner statement including the transaction details. Seeing more a more detailed view can also help to find discrepancies or missing transactions

• This is the best summary report to give to a rental owner each month 

• Track the cash flow of the property(s) 

• Report liabilities held 

• Determine income and expenses recorded for an owner 

• View the amount you should pay your owners 

• Determine when an owner was not paid the correct amount

• The rental owner statement runs on a cash basis. 

• The beginning cash balance is the amount owed to/from the rental owner, less tenant liabilities and property reserves, as of the day before the date range of the report. For example, if the report has a date range of July 1 through July 31, then the beginning balance is as of June 30.

•  The beginning balance will represent a number other than $0 if you hold back money for a property reserve, are holding tenant liabilities, or if your reporting cycle differs from when you pay your rental owner. For example, if you pay a rental owner on the 4th of each month, a report run from the 1st through the 31st might not show a $0 beginning balance.

• Go to the Reports menu
• Click the Rental Owner Statement link
• Select your report parameters. More details:

• Click Download report!