I thought I was well-organized. In general, this is true, but I found out otherwise recently when I was requested certain pieces of information by our CPA for 2022 tax filing.
In November 2021, we refinanced mortgage loans on all our rental properties. In 2022, for 2021 tax filing, I do not remember having gone through a headache trying to figure out which property was assigned which loan number. This could very well be because tax filing came shortly after the refinancing.
As the 2022 tax filing season started this month, our CPA needed year-end mortgage statements for the respective properties. Providing such information should have been a routine event, but I ended up going through a rather frustrating, “hindsight is 20/20” moment.
First, I checked each mortgage information electronically on the bank website. I found out that it does not come with the property name. In other words, I needed to go on a quest to match within our physical files which loan was for which property.
Second, in terms of each set of hard-copy documents, it had been placed in its own envelope. So, there was no confusion as to which envelope was for which property. Thank goodness. Once inside each envelope is where the frustration began. One would think that it should be easy to find the loan number, but it wasn’t. Starting out, I didn’t even know which document would have exactly what I was looking for. This meant I needed to comb through everything – at least with the first property.
Eventually, I came upon a document entitled, “Agreement to Provide Insurance on Real Property.” It came with both the property address and loan number clearly identified at the top. Before closing each envelope, I made sure to place this document at the top of the pile.
I also noted the last four digits of each loan number for the respective property name under the contact information associated with loan origination – so that, starting next year, all I need to check is the bank website, match the last four digits, and produce the year-end cumulative information for each respective property, which is what our CPA will continue to need each year. Mission accomplished.
Business life is all about streamlining one’s activities to make the process efficient and effective. Starting next year, I will be able to refer to this post, if necessary, and waste little time providing our CPA with what she needs to get her job done on our behalf.
Happy investing!
