Written by Steven C Resuta, CPA - as published on LinkedIn
Own a rental property? Keeping every receipt can add up to big write-offs! www.Resuta.com "Don’t FALL behind and start tax planning today!" 🍁 ~ Steve Resuta, CPA 🍁
As the leaves change colors and fall from the trees, it’s a perfect reminder to think about tax planning. Each leaf represents a different type of deduction, and just like leaves, they come in all shapes and sizes. Here are some tips to help you maximize your rental property deductions:
Repairs: Keeping your rental in good condition is crucial. Whether it’s fixing leaks, replacing windows, or painting a room, these expenses can add up. Think of them as the numerous leaves falling in autumn—small but significant.
Supplies: From cleaning supplies to small items like nuts and bolts, these costs help maintain your property. Keep track of every purchase.
Utilities: Any utilities you pay, such as oil, electricity, water, and sewage, are important write-offs. Always get receipts and pay by check, ACH, or credit card.
Insurance: Premiums for insurance policies on your property are deductible. Keep those receipts!
Depreciation: This allows you to write off the cost of the property over its useful life, including major improvements.
Mortgage Interest: While your mortgage payments aren’t fully deductible, the interest portion is. Track your entire mortgage payment to ensure you capture this deduction.
Real Estate Taxes: Whether paid directly or through your mortgage, real estate taxes are deductible. If you pay them directly, use a check and get a stamped receipt from the tax collector.
Advertising: Any expenses for advertising your rental properties are deductible. This includes online listings and other promotional costs.
Travel Expenses: Just like leaves falling, travel expenses can accumulate. Track all business miles and consult a tax professional to determine whether to use mileage or actual expenses for your write-off.
Legal and Professional Fees: I’ve saved one of the most important deductions for last. If you think of your rental property as an investment, it’s easy to understand the importance of professional services. Not only will accountants and attorneys keep you compliant with regulations, but they will also help you maximize tax deductions and increase profits from your rental property. Remember, rentals are like any other business or investment—you want to protect your investment, maximize your profits, and minimize your taxes. Viewing professional services as vital keys to protecting and growing your investment will help you make wise decisions and get the right professionals to guide you on your financial path.
By keeping track of these expenses, you can save more on your taxes and ensure your rental property remains a profitable investment. Happy tax planning!
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