Download Episode! Kim Boaz is the owner of Back to Basics Bookkeeping in Portland, Oregon. Debi Hertert from the podcast “Hosting Your Home” talks with Kim in this short, upbeat interview. Many short-term rental owners who use Airbnb, VRBO, or their own website don’t consider their businesses to be large enough to warrant professional bookkeeping or CPA support. Listeners who frequent Facebook groups such as the Portland Area Airbnb Hosts know that questions constantly arise about occupancy taxes, income taxes, which IRS schedule to use, what are legitimate expenses etc. And people try to answer them as best they can, but if you are not sure about what you’re doing, a professional bookkeeper and CPA combination might be the answer. Kim has 20 years of bookkeeping experience, and has five short-term rental clients at the moment. She is also a business member of Host2Host, the nonprofit association with the goal of being “By Hosts, For Hosts”. 0:00-2:00 Debi introduces Kim, and then goes into a series of questions: 2:00
- Why would a host want a bookkeeper?
: To be compliant with the IRS and the State; become sure of how your business operates
- What kind of trouble could a host get into?
: The most common problem is mixing business and personal income in the same account vs having a separate business account. And many people will report the gross income without including their expenses that would help them.
- How many Airbnb hosts do you take care of?
: Five hosts now. I’ve been doing Airbnb’s for 3-4 years, and have learned as we went along. I have also worked with CPAs who are also learning their way along. And, I have been learning hosts’ needs. 7:00
- What are some best practices?
: Keep accounts separate; keep receipts (don’t throw away that paper receipt); and use some sort of record keeping software, like QuickBooks.
- If you’re keeping digital records instead of paper records?
: There are lots of apps out there to use to scan in receipts. 9:00 Kim
: There is an app called “Mile IQ” that has a 14 day free trial and allows you to swipe left or right for business or personal as you begin a drive, and you get a monthly report. Hosts can only deduct either Auto expenses or mileage; you can only report one, not both. 10:45 Kim
: That has ranged a huge amount in the past five years, and currently has four different packages, from $20 - $60/month. But as a client with a bookkeeper who has the software, you can pay wholesale by using their subscription as the base. 12:14
- What’s the difference between a bookkeeper and a CPA?
: A bookkeeper does the daily duties, tracks all the receipts, and enters data into accounting software. A CPA takes the information from the bookkeeper and prepares the tax return. There are some bookkeepers who are also Licensed Tax Preparers, but they don’t go through the more extensive training that CPAs do. 13:15:
- What would it cost someone to hire a bookkeeper?
: That also varies widely. It depends on how many accounts a client has, and how many transactions each account has. Typically, at the beginning there is a higher cost as the bookkeeper gets all the entries caught up for the year.
- What if you start out at the very beginning, with an Airbnb host who has just one listing? Ballpark?
: Getting them set up on QuickBooks might cost $250-$350. That would be to organize and set up, implement the Chart of Accounts etc. Then I give clients the option of the client doing the data entry, or me doing it, or some combination. If a host feels like cash flow is an issue, I go through baby steps with the client. 16:42
- Have you dealt with any audits?
: Not as far as rentals are concerned, but I have been involved in other audits. If a client gets audited, their bookkeeper can join them. The more organized you look, for example if you have a system, the more they will leave you alone. 17:15:
- Any horror stories to share?
: No horror stories, but I’ve seen everything! I’ve been doing bookkeeping for 20 years. The biggest challenges are clients who bring a giant tote of receipts and haven’t filed taxes in several years. But I actually enjoy tackling these super-challenging problems. I work out a game plan with the client, set up the accounting software, all the steps needed to get back into compliance. 19:13
- You wrote articles for the Host2Host website, correct? And do you have anything else you’d like to share?
: Yes. My biggest advice to hosts is to not be afraid to reach out to bookkeepers. And, I created a non-profit called All Star Accounting Professionals – the association has all kinds of professional members. Hosts are welcome to reach out to me via email with questions. 20:35
LINKS Kim’s articles on the Host2Host.org website (H2H.org members can read both articles, non-members just the summary): https://host2host.org/Linked-Content
Kim’s business: www.backtobasicsbookkeeping.com
Kim’s nonprofit professional association: http://allstaraccountingprofessionals.com/