These include but are not limited to keeping track of the profit or loss, obtaining necessary data to create strategies to maximise profits, allowing you to claim tax deductions, and audit purposes. There are several other reasons why you should maintain a comprehensive record of your rental income and expenses. You can avoid these mistakes with a simple Excel method for tracking rental income and expenses. Neither would you want to miss out on deductions that would potentially decrease your net taxable income. You wouldn’t want accidental mistakes like double-booking an expense to become an issue during a tax audit. Importance of Tracking Rental Income and ExpensesĮven if you own only one property that you rent out, you need to have a proper system worked out for tracking income and expenses. This is one aspect where it is crucial for you to be meticulous.
However, you do need to actively keep track of rental income and expenses. Renting out your property (or properties) is an excellent way to earn some passive income.
