Different Tax Deductions for Landlords

For most landlords, ownership pride is the driving force behind purchasing rentals; they would like to be their bosses. But to others, it’s the monetary benefits they would get like rental income and constant cash flows, and the high chances of taking loans in managing their mortgages.

Whichever the reason, every owner should strive to reduce their management expenses.  And one of the ways to do that is through knowing what types of tax break-through are available for property owners, then taking advantage of them. Amongst the break benefits, landlords stand to gain is the tax deductions benefits.

Below are some of the property tax solutions and deductions that every landlord should consider. Keep in mind that all of them may not apply to all rental owners.

Mortgage Interest

This is the most typical and significant deductible expense that most homeowners are familiar with. It’s the interest charge a loan used to purchase/acquire or improve a rental property. It also entails interest on any credit card for goods or services applied in rental activities.

The good news about mortgage interest is that landlords can always deduct their interests through rental expenses. That makes it one of the biggest deductions homeowners can claim.

Repairs Deductions

The Internal Revenue Service has two types of property repairs that are deductible. They include repairs done to return things or conditions to their original conditions and repairs done to improve the state of the property.

Examples are replacing windows or doors, repainting and fixing leaks and gutters. All these are deductible provided they are reasonable in the amount, ordinary and necessary.

Local Travel Deductions

Instead of hiring a Property Management Company, some landlords would manage their rentals by themselves. Unfortunately, some landlords would have property far from their homes or workplace.

Meaning they would have to drive to visit their property for either routine checks or to handle some tenants’ complaints. If landlords use their means like driving their cars to move to the property, they can deduct their travel expenses. That they can do in two ways:

  • By deducting their actual expenses like upkeep, repairs, and gasoline
  • Or deploy the standard mileage rate as dictated by the IRS

Also, local travel allows landlords to deduct overnight expenses if they travel to the property during the night. So, they can deduct airfare, hotel meals, and other related costs. The overnight deductions are under the scrutiny of the IRS, so landlords must ensure they stay within the law’s accommodation to avoid drawing unnecessary attention.

Home Office

Landlords who use their rental property as their office can deduct the home office expenses from their taxable income, provided they meet specific minimum requirements. Still, this deduction applies to any space allocated for office work or workshop programs.

Insurance Deductions

Landlords can also deduct premiums for any insurance cover for their property. These may include insurance premiums against theft, flood, fire, and landlord liability. The landlord can also deduct the cost of employees’ health and workers’ compensation.

Finally, there are various tax advantages of owning a rental property.  Contact the property tax solutions for guidance on manageable and profitable tax deductions.