Tax Write Offs that Landlords and Property Owners Don’t Want to Miss
If you’re a landlord or a property owner, making money on your investment doesn’t always come naturally. Sure, if you buy some property and begin renting it out, you might make a decent profit. However, there are a whole host of other expenses that you’ll need to cover over the course of your property’s lifetime.
Such expenses might seem like necessary expenditures required to run a rental property, but there are a great number of them which you can write off during tax time. In case you own a property and you’d like to make a little more profit off of renting it, here are some tax write-offs you can use to boost your earnings over time.
Any expenses you incur while driving to deal with tenants or pick up equipment needed to complete repairs are tax-deductible. The only thing you can’t deduct is the cost of travel on your way to do the actual repairs themselves. The best two ways to accomplish this are by checking the IRS website and using the standard mileage rate, or by tallying up your total expenses for things like vehicle upkeep, repairs, and gasoline before adding them to your tax deductions.
Overnight travels can even include hotel bills, airfare, meals and more as tax deductions. You need to document these things to the fullest extent, however, if you want to avoid ending up on the wrong end of an audit.
2. Insurance Premiums
]The insurance premiums for insurance you have on any rental properties are tax-deductible. This includes landlord liability insurance, flood insurance, theft insurance, and fire insurance as well. If there are any employees working under you, you can deduct their worker’s compensation insurance and their health insurance as well.
This is one of the biggest tax deductions that landlords around the country miss on a consistent basis. Some examples of interest that can be deducted include any mortgage interest payments you have on loans that you had to use to improve or acquire rental property, or interest on credit cards that you used for services or food during a rental activity.
4. Independent Contractors and Employees
You can deduct the expenses of both employees as well as independent contractors from your taxes. This could include electricians, plumbers, general repairmen, gardeners, tree trimmers, roofers, painters, and employees like resident managers, janitors, and more. The guidelines on this one can vary from state to state, so be sure to check your local laws for specifics.
Making Money as a Property Owner is Easier Than You Think
There’s more to making money as a landlord or property owner than simply buying a property and renting it out. The government is willing to cover quite a few of your expense, provided you know how to add them to your tax deductions.
Shaving things like travel expenses, employee expenses, insurance premiums, and interest off of your bill at the end of the year is as easy as providing the correct documentation. By writing off as much as you legally can, you’ll make much more money as a landlord or property owner.