Tax Strategies for the Savvy Real Estate Investor: Deductions

This week I started reading The Book on Tax Strategies for the Savvy Real Estate Investor by Amanda Han.

I’m a CPA, but non-practicing, and I never did much with taxes. I feel pretty savvy, but wanted to make sure I wasn’t missing something. So far I’m just confirming my knowledge, but I’m far from done reading the book.

We take a lot of the deductions she mentions. We keep receipts when we buy anything related to the rentals, or meetings or meet-ups, small birthday and Christmas gifts for tenants, and claim a portion of Bruce’s cell phone.

There are a few things we’re missing out on because we’re lazy… when we first started we took great notes of mileage and trips to the rentals. It was helpful for keeping track of when were last at a unit or to share with new investors how much time we spent at properties self managing. But over the years I’ve gotten tired of nagging Bruce for trips, and we are claiming less and less mileage. I get so tired of nagging Bruce for receipts and information!

There are also a few things we’re missing out on because we are super conservative. We could probably take the home office deduction, but the computer room doubles as our guest room. What we should do is claim part of the square footage, since once section of the room stays an office even when we do have guests. When I got my new laptop last year I probably could have considered it a business expense, because I spent a bulk of my at home computer time on rentals tracking, paperwork, and research. We could probably claim some items that we lose the receipts for, but I am a real stickler that if we don’t have a receipt it doesn’t go on our taxes.

I think I could argue that more expenses are legitimate write offs, but I also feel like we’ve hit a pretty good balance of time spent tracking and how far we are willing to push the envelope.

And yes, I did deduct the cost of this book!