Tax Write Off for Landlords - what % comes back to me

[Kristen Dolotina]

Good morning!

I am a new landlord of a condo and am curious about my tax write off's.  I'm clear what it is I can write off, what I'm not clear about is how much (or what %) of each category will come back to me.  

Here are some of the categories that I know of.  If I've missed anything, please let me know.  Also, if there are any good reads out there, I would love to know that too.

Interest - HOA - Appraisal - Repairs and Maintenance - Home Inspection - Devices - Travel related - Insurance

Thank you, Bigger Pocket Family!

Kris

[Kevin Sobilo]

@Kristen Dolotina, the % is dependent on your tax bracket. You may get NOTHING back if you didn't already pay taxes to be refunded.

I would not think of it as "getting money back". You are reducing the amount upon which you are required to pay taxes. Most times its for a hard expense like insurance or mortgage interest but sometimes its for something like depreciation.

Just like any business you might bring in $100k but have $50k in expenses. You only expect to pay tax on the profit of $50k. The same is true here. You have rent coming in and expenses going out and only pay tax on the net profit.

[Account Closed]

Hey Kristen! 

This all depends on your tax bracket, state, marital status, etc. There are lots of factors that can effect this! Thats what makes our job as accountants so fun. We get to go through peoples situations and find every possible write off / tax savings possible and massively lower their tax bill in many cases 

[Jason Malabute]

Hi Kristen,

It’s great that you’re looking into your tax write-offs! As others have mentioned, the percentage of savings you get back really depends on your individual tax situation, including your tax bracket, state, and other factors. Think of it not as ‘getting money back’ but more as reducing your taxable income, which can lower your overall tax liability. Each category, like interest or repairs, helps to reduce the amount of income you’re taxed on, but the actual benefit you receive will vary. It’s always a good idea to consult with a tax professional who can look at your specific situation and optimize your deductions.

Best of luck with your new condo!

[Bill Hampton]

@Kristen Dolotina

As the others have stated there are a lot of factors that will determine your refund amount. This includes sources of income and withholding amounts. 

I recommend finding an accountant who specializes in real estate taxation and tax planning.

You may want to consider working with your accountant remotely to expand your options.

I would also recommend looking for a accountant willing to work with you throughout the year. You want an accountant who can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.

There are over 20 real estate accountants on this site. Reach out to a few and see who you like.

You can also ask members of your local real estate investors association for real estate accountant recommendations.

Good luck.

[Ashish Acharya]

@Kristen Dolotina As a landlord, you can deduct expenses like mortgage interest, HOA fees, repairs and maintenance, insurance, and travel related to managing the property. The amount that "comes back" to you depends on your tax bracket; for example, if you're in the 24% tax bracket, a $1,000 deduction would reduce your taxes by $240.

To fully understand and maximize these deductions, resources like Stephen Fishman's "Every Landlord's Tax Deduction Guide" or IRS Publication 527 can be helpful. The goal is to create paper loss and offset your W2/business income.

[Nathaniel Quesenberry]

Kristen,

I'll add a note that you are allowed to depreciate the condo that you have as well as I didn't see mention on your post. 

With respect to what you get back, I'll echo other replies here and state that it is dependent on a lot of factors including your marital status, other income, etc. which determine your tax rate. 

The expenses can offset the rent income and in some cases can offset your other income if you qualify as a Real Estate Professional or have an AGI of $150,000 or less. If you have a loss you could get tax savings based on the amount of loss. 

[Basit Siddiqi]

The first question would be if you can offset the rental losses against your other forms of income.
The second question would be what is your tax rate.

if you can offset the rental losses and your tax rate is 30%, you will get about 30% back for the rental losses.