06 Sep 5 Rental Property Tax Deductions Landlords Need to Take
If you’re a landlord, you probably pay a lot of taxes every year. Problem is, most landlords (just like realtors) pay much more than they should. This is because they aren’t taking enough rental property tax deductions.
It turns out that having rental property provides a lot of MAJOR tax deductions that could cut thousands off your annual return! Those extra savings could bridge the gap between losing money on a rental and getting some serious profits.
If you’re ready to stop paying so much on your taxes, then read these 5 rental property tax deductions landlords need to take.
1. Depreciation
In our experience, depreciation is the tax deduction that most landlords don’t take. Essentially, you divide the value of your rental property over 27.5 years. Whatever the value of your rental property is divided by 27.5 is the depreciation deduction you can take. Most landlords can claim a few thousands dollars in a hefty deduction just through depreciation!
If want to know more about how depreciation works, follow this link.
2. Maintenance
Being a landlord, you’re probably used to keeping up with your property. After all, you want your property looking its best for potential buyers. The cost of fixing or renovating can be another tax deduction. This way, you can keep your property in tip top shape affordably.
3. Mortgage Interest
With a mortgage comes interest. That’s the way of life. Luckily, landlords can take advantage of that interest by writing it off as a tax deduction at the end of every year. Because this is an easy value to calculate, mortgage interest is an easy deduction to take.
4. Property Taxes
Owning anything comes with taxes. As a landlord, you probably deal with some hefty tax payments on your property. However, you can make those taxes work for you by decreasing how much you’ll owe to the IRS. Property taxes are fully tax deductible, which can provide a nice saving on your return.
5. Insurance
Smart landlords are going to have insurance for their rental property in case of an emergency. Having insurance can work for you in more than one way, though: not only does it give you peace of mind in a crisis, but the premiums are tax deductible as well.
Have any more questions about rental property tax deductions? Call us at 614-524-4888!
