7 LANDLORD TAX DEDUCTIONS
It’s tax season again. And if you’re like most landlords, you’re busy tying up loose ends for Uncle Sam. But are you taking advantage of all the landlord tax deductions that are available to rental property owners?
Here is a list of the top landlord tax deductions that can help make the difference between whether or not you profit or lose money from your real estate investments:
The cost of a rental property is deductible through depreciation. But watch out: this only applies in the years after the year of actual purchase.
You can deduct the interest accrued on:
- mortgage payments on loans used to buy or upgrade rental property
- credit cards used for goods and services needed to maintain a rental property
Premiums from insurance associated with rentals are also fair game for deduction. Following are several kinds of insurance that qualify:
- fire and flood insurance
- theft insurance
- landlord liability insurance
- health and worker’s compensation insurance (if you have employees)
The cost associated with necessary and justifiable repairs (for leaks, broken windows, peeling paint, etc.) you make in a given year are fully deductible from your tax bill for that twelve-month period.
5. Employees/independent contractors
Whenever you hire anyone – from a repair person to an account or an attorney – to perform services for you related to your rental activities, you can deduct their wages or fees from your tax bill.
6. Casualty losses
If your rental property is destroyed because of a fire, flood or similar unexpected event, you may be able to get a deduction for all or part of your loss. How much you’ll be able to deduct will depend on how much of your property was destroyed and how much of the loss was covered by insurance.
If you have to do either short or long-distance travel that is related to your work as a landlord, then you can deduct the expenses related to that travel. Some of these activities can include:
- driving to a rental unit to deal with a tenant concern/complaint
- going to the store to purchase items for a repair work
- going to a professional conference or meeting related to landlording issues
At Herman Boswell, we specialize in helping landlords like you breathe a little easier. We’ll organize your business – and all the paperwork that goes with it – so that doing your taxes and managing your properties is a snap. Contact us today and let us show you a better way to go!