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Correct way to handle vacation rental payments in Quickbooks (not integrated with OR) ?

Replies: 4 - Pages: 1 - Last Reply: Apr 11, 2019 9:07 AM by: Paul W
Rich S
Registered: 12/28/18
Correct way to handle vacation rental payments in Quickbooks (not integrated with OR) ?

Hi,

(See QUESTIONS at bottom)

Anyone have a good handle on the accounting/correct way to be handling taxes relative to Quickbooks?

Here's my understanding:

A) There is a Financial Report available in VRBO that lists "Gross booking amount", "Deductions" and "Payout"

B) For each booking, VRBO deposits the "Payout" amount into my bank account (Gross booking - Deductions)
example: Gross booking amount = $243.81
Deductions = $7.31
Payout = $236.50

C) At tax time I run a report on the total funds received as 'Gross bookings'


NOTES
I'm pretty sure I am required to pay Sales Taxes on the Gross booking amount. In other words, I can't just import the payments I receive in my bank account, but instead I need to record each booking transaction in Quickbooks with two accounts. A positive account for the gross booking amount, and a negative amount for the deductions. I'm not mentioning cleaning fees because they are included already in the Gross booking amount. Mentally I'd like to think about paying taxes only on the cash I end up with in my pocket ***BUT*** I don't think that's how sales taxes work. I have to pay tax on the full amount paid by the guest, which includes the deductions that VRBO keeps and the (pass thru) amt I collect and pay to my cleaning service. And all this gets more complicated when I start using AirBNB and bookings in OR itself.

QUESTIONS
1) Is my understanding correct?
2) Suggestions for how to automate this (without using OwnerRez)? EG: I imagine I can import the Financial Report from VRBO in some way to cause the Gross bookings and deductions to be associated with each transaction, resulting in the correct Payout amount

PS - I'm not currently interested in using Quickbooks Online. I have other businesses that are tracked in Quickbooks Pro and don't want to have to reinvent my accounting practices... Just need advice about how to practically handle tax time each quarter.

JTVRs
Registered: 6/25/18
Re: Correct way to handle vacation rental payments in Quickbooks (not integrated with OR) ?

Reading through this makes me think you should talk to a CPA to set yourself up. Several items look like a possible lack of understanding of VR accounting. Taxes etc are not automatically like other industries.

Don't depend on a forum to guide your accounting, including state or local issues...

Rich S
Registered: 12/28/18
Re: Correct way to handle vacation rental payments in Quickbooks (not integrated with OR) ?

JTVR - I'd prefer answers, not suggestions about my lack of understanding. Perhaps you can revisit my questions and give specific (and useful) comments?

Paul W
Registered: 6/9/09
Re: Correct way to handle vacation rental payments in Quickbooks (not integrated with OR) ?

Hi Rich,

You could copy the model we use in integrating with QB, only do it yourself manually with the Desktop version. Basically, each booking is turned into an invoice in QB and then each payment is turned into a QB payment against that invoice. The invoice date is the arrival date of the booking so that the income is not realized until the month of the booking. That allows you to wait to pay the tax until the month of stay has booked in case the booking gets cancelled. I don't know of any tax authority that will give you a refund.

We are going to be changing (or adding) the model to use something that accountants like better which is to have a QB invoice for each payment that occurs with a final "close out" invoice once the booking has arrived to realize the income. There are several benefits to this model and, as I said, the accountants we work with have said this is a better model.

I would recommend talking to Ximplifi Accounting which we have mentioned before on this forum. We can send a recommendation email for you if you'd like. They have helped a bunch of OR users already and understand what OwnerRez and QB can both do.

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