Landlord Tenant

Top Tips of Tax Deductions for Landlords

Posted on May 24th, 2008 | by John Glenn |

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There are many tax deductions available to rental property owners. But many of them pay more taxes as they have to really pay because of lack of knowledge about the tax deductions. Rental real estate provides more tax benefits than almost any other investment. That’s why small landlord think that there is not so much earning in this business as their large portion of income is spent in these taxes.

These benefits make the difference between losing money and earning a profit on a rental property. So there are some tips to save money from taxes for owners of small residential rental property.

• Interest is often a landlord’s single biggest deductible expense. Interest on credit cards, on loans for various purposes for their rental property should be exempted from the taxes.

• Landlords get back the cost of real estate through depreciation after a year. This involves deducting a portion of the cost of the property over several years.

• The costs of repairs of rental property are fully deductible in the year in which they are incurred.

• Landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity.

• If you travel overnight for your rental activity, you can deduct your airfare, hotel bills, meals, and other expenses. But all the documents should be kept very carefully.

• Landlords may deduct their home office expenses from their taxable income.

• Hiring anyone to perform services for your rental activity, their wages should be deductible from the taxes as a rental business expense.

• You can deduct the premiums you pay for almost any insurance like fire, theft, flood insurance, for your rental activity.

• You can obtain a tax deduction for the casualty losses like any type of damage or destruction.

• You can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, as operating expenses.

Tags: tax deductions, tips for landlords



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