We all know margins can be tight for rental businesses. You need to look for every way to save money if you are going to stay afloat. One way to keep more of the money in your bank account is to understand tax deductions for landlords.
You will find many landlords who pay more than they need to because they are unaware of several tax breaks. This could cost you several thousands of dollars each year.
Which tax deductions do you need to know about? Read on to learn about tax deductions for rental businesses.
(For tax information specific to your portfolio, please consult your tax advisor.)
7 Tax Deductions for Landlords
Mortgage Interest
Unless you were able to pay for a property entirely upfront, you are paying interest to a bank. Just like homeowners, landlords can deduct mortgage interest from their taxes. This simple deduction could save a lot of money at tax time.
Repair Costs
Repairs and maintenance are standard parts of managing a rental property. The costs of repairing rental units can serve as deductions on your taxes. Need to fix a broken window, repair a wall, or fix an air conditioner? The costs are legitimate tax deductions.
Insurance
Rental businesses need all sorts of insurance. As you are probably aware, it is a significant expense for landlords. While you might not be able to ditch your insurance, you can write the costs off on your taxes.
Employee Compensation
Do you have employees working for your rental business? You can take tax deductions for the compensation you pay them. Whether it is property managers, maintenance workers, groundskeepers, or anything else, you can deduct their wages.
Legal Fees
Legal fees are an unfortunate part of being a landlord. You never want to evict anyone, but some tenants may leave you with no choice. The legal costs of eviction can be hard on smaller businesses. However, you can deduct the costs when you file your taxes.
Depreciation
Landlords might be able to take deductions for several different types of depreciation. The building itself can be depreciated over time. You can also write off depreciation for items like appliances or for things like driveways and roofs.
Travel Expenses
As a landlord, you can take deductions for different types of travel. If you make rounds checking on properties or drive to perform repairs, you can write it off. If you have properties in other states, you can deduct costs for airfare and hotels when you travel for business.
These are just a few of the deductions you can take as a landlord. We recommend talking to your accountant to learn more about the available deductions and how they might apply.
Redfish Property Management has the skills and expertise to help you maximize the value of your rental properties. Contact the team at Redfish Property Management to learn more about the services we provide.
Thanks for visiting!
