If You Own Rental Properties, You Should Take Full Advantage of the Tax Deductions

Posted By Pedro Gonzalez, CPA on Feb 7, 2020 |



Most people are unaware that rental real estate gets more tax deduction benefits than almost any other investment. If you do not take full advantage of tax deduction benefits, it can actually mean the difference between having a loss or a profit from your rental investment property. Tax deductions are meaningless if you do not take advantage of them like you should.


What are some of the top tax deductions?

In no particular order of importance, some tax deductions you can use are:

    • Professional and Legal Services – you can actually deduct what you pay your attorneys, property managers, accountants, investment advisers and any other professional you use.
    • Home Office – there are minimal requirements that you must meet, but you can deduct expenses for your home office from your taxable income. Not only that, the deduction applies to the space allotted to office work, a workshop and any other space in your home that you use for your rental properties business.
    • Local Travel – as a landlord, you are allowed a tax deduction anytime you drive anyplace as part of your rental business. If drive to one of your apartments to speak to a tenant about a complaint, for example, or if you go to a store to buy something for repairs, you are entitled to deduct the travel expenses involved.
    • Repairs – rental properties need repairs. This is a fact and repair costs are deductible in the year in which they were done, provided the costs are reasonable, ordinary and necessary. Repairs which are deductible include, but are not limited to, fixing leaks, floors and/or gutters, painting, plastering and broken window replacement.
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      These are just some of the deductions that you can make on a rental investment. If you only rent part of your real estate investment, you must divide certain expense between the part that you use for personally and the part you are renting out. For example, if you have a two-family property and you occupy one half of the property, you may only deduct half of the expenses for the property.
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      You should be as smart as you can about your rental investment so that you can maximize your tax deductions. Therefore, you should be aware of the other deductions that you can use, which are actually too many to list in short article. However, you should definitely talk to your accountant and find out what deductions are available to you as a landlord. If you like to do your own taxes, then you should find some really good software which will help you with all of the deductions that you can make.