CAPITAL EXPENSE TRACKER VIDEO TUTORIAL
The Capital Expense Tracker is used to track your capital expenses for your property.
Your capital expenses are expenses used to purchase the property or used to make improvements to the property. It’s important to note that theres difference between improvements and repairs because each are treated differently for tax purposes.
An improvement is any expense paid to improve the property, better the property or restore the property. According to the IRS, an improvement could be an addition, new roof, new windows, new HVAC system, kitchen and bathroom moderniszation, and new flooring, among others. These types of improvements are capitalized and depreciated over the useful life of the improvement.
Repairs are generally maintenance items that do not add significant value to the property that are necessary to keep the property in liveable condition…These would be painting rooms, fixing a leaky faucet, replacing a broken window, etc. Unlike Improvements which are depreciated over time, you can deduct the full cost of the repairs in the tax year the repairs were completed.
I have posted a link below this video to the IRS website which you can use as a resource and guideline to help delieneate between improvements and repairs. Also, when in doubt talk to your accountant!
So now that we know which expenses qualify as a Capital Expense, lets talk about how to record an expense to the Capital Expense Tracker.
The first column on the Capital expense tracker is the date the expense was paid. It’s important to input the date information, so you can calculate the expenses paid in any given year.
Once you input the date, you can input a brief description or memo of the expense that was paid…For example, our first Capital expense was for purchasing the property, so we made a brief note about the purchase.
Next, you can select the Expense Type or Category from the dropdown menu which will be used to organize/ and categorize your Expenses into separate Expense Categories.
The dropdown menu is pre-built with a list of typical Expense Categories, but you can change and customize these Expense Categories on the Category Setup sheet.
Once you select, the Expense Category, the final selection is the Vendor that was paid for the service. Categorizing your expenses by Vendor will help you track how much you’ve paid to each vendor for each year for 1099s.
You can setup your Vendor information on the Vendor Setup sheet, which will automatically feed over to the Vendor dropdown list.
Once you select your Categories, you can input the quantity and the amount of the expense paid.
The quantity will be typically be 1, because you are typically making one payment, but if you had multiple quantities you could input a value other than 1.
The amount column is the amount of the each payment. Once you input the quantity and amount, the quantity is multiplied by the amount to calculate the Total Expense Amount.
The Total Capital Expenses paid are then tracked at the top of the Capital Expense Tracker.
The Capital Ex Tracker has some other cool features that allow you to sort /filter the expense information as well. Along the table header, you will notice there are dropdown arrows. These dropdown menu allows you to sort an filter your expense data by date, by category, or by vendor.
To sort your expenses by date, simply click the dropdown arrow in the date column, which will give you options to reorder the expense items by date or allow you to sort the expense data by a specific date range.
You can also sort by expense category or vendor, so if you wanted to review all of your Expenses paid to a particular vendor in 2017, you could sort Expense Tracker to show that information.
Once you input all of your operating expense information, this information feeds to the Capital Expense Reports, so you can create professional accounting reports and provide it for your accountant for your annual taxes.
Your capital expenses are expenses used to purchase the property or used to make improvements to the property. It’s important to note that theres difference between improvements and repairs because each are treated differently for tax purposes.
An improvement is any expense paid to improve the property, better the property or restore the property. According to the IRS, an improvement could be an addition, new roof, new windows, new HVAC system, kitchen and bathroom moderniszation, and new flooring, among others. These types of improvements are capitalized and depreciated over the useful life of the improvement.
Repairs are generally maintenance items that do not add significant value to the property that are necessary to keep the property in liveable condition…These would be painting rooms, fixing a leaky faucet, replacing a broken window, etc. Unlike Improvements which are depreciated over time, you can deduct the full cost of the repairs in the tax year the repairs were completed.
I have posted a link below this video to the IRS website which you can use as a resource and guideline to help delieneate between improvements and repairs. Also, when in doubt talk to your accountant!
So now that we know which expenses qualify as a Capital Expense, lets talk about how to record an expense to the Capital Expense Tracker.
The first column on the Capital expense tracker is the date the expense was paid. It’s important to input the date information, so you can calculate the expenses paid in any given year.
Once you input the date, you can input a brief description or memo of the expense that was paid…For example, our first Capital expense was for purchasing the property, so we made a brief note about the purchase.
Next, you can select the Expense Type or Category from the dropdown menu which will be used to organize/ and categorize your Expenses into separate Expense Categories.
The dropdown menu is pre-built with a list of typical Expense Categories, but you can change and customize these Expense Categories on the Category Setup sheet.
Once you select, the Expense Category, the final selection is the Vendor that was paid for the service. Categorizing your expenses by Vendor will help you track how much you’ve paid to each vendor for each year for 1099s.
You can setup your Vendor information on the Vendor Setup sheet, which will automatically feed over to the Vendor dropdown list.
Once you select your Categories, you can input the quantity and the amount of the expense paid.
The quantity will be typically be 1, because you are typically making one payment, but if you had multiple quantities you could input a value other than 1.
The amount column is the amount of the each payment. Once you input the quantity and amount, the quantity is multiplied by the amount to calculate the Total Expense Amount.
The Total Capital Expenses paid are then tracked at the top of the Capital Expense Tracker.
The Capital Ex Tracker has some other cool features that allow you to sort /filter the expense information as well. Along the table header, you will notice there are dropdown arrows. These dropdown menu allows you to sort an filter your expense data by date, by category, or by vendor.
To sort your expenses by date, simply click the dropdown arrow in the date column, which will give you options to reorder the expense items by date or allow you to sort the expense data by a specific date range.
You can also sort by expense category or vendor, so if you wanted to review all of your Expenses paid to a particular vendor in 2017, you could sort Expense Tracker to show that information.
Once you input all of your operating expense information, this information feeds to the Capital Expense Reports, so you can create professional accounting reports and provide it for your accountant for your annual taxes.