Your Guide to Maximizing Rental Property Tax Deductions

By Green River Property Management | March 21, 2019

 

 

As a landlord, you'll owe taxes on your Jacksonville, Fl investment properties. Are you prepared? Do you know everything you can deduct for your business? 

For a successful investment business, you want to maximize how much of your hard-earned money you keep. From property maintenance to other expenses, your deductions help you at tax time. 

Owning rental property can benefit you at tax time. Despite the benefits, you might pay more taxes than you need to pay if you're not careful.

Pay only what you need to pay in taxes by knowing your deductions. Here's a guide to tax deductions for your rental properties. 

A desk with tax documents, a clipboard and glasses on top

Repairing Your Properties

Making repairs to your Jacksonville rental properties is worth the effort. Not only do you keep your properties in good shape for tenants, but you can also deduct repair expenses. 

Qualifying repairs include repainting, fixing gutters, roof repairs, fixing leaks, repairing damaged floors, fixing broken windows, or plastering walls. 

Be careful what you qualify as a "repair" vs. an "improvement." An improvement is an investment in your property that increases the value. 

Adding a new pergola is an improvement, not a repair. Improvements don't qualify as a deduction. However, repairing an existing patio covering could be deducted as a repair. 

Consult with your Jacksonville property management company if you have questions about which expenses are a repair vs. an improvement. 

Traveling for Business

Your business mileage might be one of your most significant deductions. When driving to and from your rental properties for any business purpose, deduct your mileage. 

Business at your rentals includes performing maintenance, doing a move-in or move-out inspection, or showing a home to a potential tenant. You can also deduct mileage to pick up supplies or meet with your property management company. 

Remember to be careful with improvements. Your mileage isn't deductible if you travel to a property to work on an improvement. 

However, you can deduct your mileage when working on a repair on your property. 

Rental Property Depreciation

The cost of the house or other rental property is not fully deductible in the year that you purchase a rental property.

You can deduct a portion of the cost of a rental property pro-rated over the expected lifetime of the property. This is depreciation. 

Depreciation begins when the property is first available for tenants to rent. If your property sits empty for a while, there's no depreciation to deduct.

When you buy a property, work quickly to get it ready for new tenants to maximize the depreciation deduction. 

Mortgage Interest

Mortgage interest could be your single most significant expense for a deduction. Don't forget about it! 

If you carry a mortgage on any of your properties, deduct the mortgage interest.

Hands holding house above a workspace 

You might also be able to deduct interest on loans needed for repairs to your rental properties. Consult with your Jacksonville property management company if you're unsure about what kind of interest you can deduct.

Business Insurance Policies

You can deduct most--if not all--insurance policies for your properties and business. Keep good records of any insurance policies you have for your rental properties. 

These policies can include fire, theft, or flood insurance for rental properties. You can also deduct landlord liability insurance on your taxes. 

If you have employees as part of your landlord business, deduct worker's compensation insurance. If you provide health insurance, deduct that, too. 

Your Office

Whether it's part of your home or a separate space, your office and associated expenses are deductible. 

Even if you spend considerable time at your properties or taking care of tenants needs, make sure you have a home base of operations. You need a place to host your business files and run your business. 

You can also deduct space for a workshop or storage space used for your rental property business. 

Be sure your business spaces meet the IRS requirements of an office or workshop space. If the spaces meet the criteria, you can deduct a portion of utilities and rent.

Legal and Professional Services 

If you use any professional services to help maintain your properties or your business, you can deduct those services. These include lawn services or pest control services. 

Be sure you deduct fees for attorney services related to your rental properties. If you use an accountant or property management company, those fees are also deductible. 

Work With Experts to Help Identify Deductions

You read that right. Partnering with a Jacksonville, FL property management company benefits your taxes. 

Green River Property Management services are tax-deductible. Deduct our fees while we shoulder the day-to-day work for you and your properties. 

Not only do we handle repairs and other time-consuming tasks, but we'll also help you keep track of expenses and every item you can deduct on your business taxes. 

If you're searching for the best Jacksonville property management partner, we're here to help. Get started with a free rent analysis of your property. Let's begin maximizing your profit and your tax deductions. 

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Topics: Property Management, Landlord Tips, Tax Deductions

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