Tax Write-offs for Rental Property

I think it’s fair to say that most people dread tax season. Except maybe for accountants. But for the rest of us, getting everything ready for Uncle Sam is usually a busier and more stressful time of year. Investors are no exception. There’s a lot of work that needs to be done to get your taxes in order when you own rental property, but it’s also a good time to remind yourself of just how many benefits come with owning said property. When compared to other investments, they’re leaps and bounds above the rest when it comes to tax breaks and other benefits.

One way to get the most bang for your buck is to take advantage of every write-off you can, so that your taxable income is decreased. The less taxable income you have, the less you’ll pay in taxes, so it’s important that you hit all the write-offs you can. You’re probably familiar with a lot of them already, and if you’re not, your accountant should be.

The list below is by no means exhaustive, but there may be a few items on there you haven’t included.

• Property taxes
• Depreciation
• Property management fees
• Insurance premiums
• HOA fees
• Mortgage interest and points
• Bank fees
• Legal fees
• Court filing fees
• Accounting fees
• Professional development/education (i.e., real estate seminars, conferences, etc.)
• Permits
• Home office expenses (i.e., computer, phone, wifi, supplies, postage, shipping, etc.)
• Travel/meals/entertainment (make sure these are actually business-related)
• Business vehicle & related expenses, including gas
• Improvements to the property
• Appliances & other equipment for the property
• Repairs & maintenance
• Pest control
• Landscaping
• Light bulbs
• HVAC filters
• Advertising fees (newspaper, radio, signs, etc.)

Did you have all of these write-offs? Hopefully I was able to give you at least a few that you weren’t using. Before filing, be sure to go over everything with your accountant to ensure that nothing is missing or inaccurate. And remember, it pays to invest in real estate, and I’m not just talking about cash flow and appreciation. I’m talking about all the benefits that come your way at tax time, so make sure you’re taking full advantage!