Many people turn to the rental industry as a sound investment opportunity. In America, there are approximately 48 million homes that can be rented, including apartments and condos all across this country! Becoming a landlord comes with many responsibilities, from keeping up your properties to reducing taxes you pay each year.
The right accountant can make a world of difference when it comes to reducing your tax burden. If you’re a landlord, try to find an experienced and reputable one for this particular task because they will be able to help with any deductions that might apply in order to save money year after year without hassle or worry about finding new ways around paying the state more than what’s legally due each April 15th (or however far away that date actually is).
1) Cost of repairs
Renting is not as easy money. You will have to repair your property over time, and these repairs can range from minor cosmetic issues like painting or replacing door locks (which are tax-deductible) all the way up to major problems with water damage– which isn’t necessarily bad if it has been flooding recently near you? Documenting what’s being spent on repairs makes sense for accounting purposes, too, because they can be claimed later during tax season!
IRS list has many different jobs that can be considered repairs, but if you want to save money on your taxes, then it’s best not to try and figure out the complexities yourself – hire an accountant!
The professionals with intimate knowledge of how tax codes operate will help make sure any repair work done for business purposes gets reclaimed through deductions offered in law as well as taking advantage of other opportunities available only because they specialize in a said area like estate planning or health care consulting services too.
2) Passive Income and deductions
Did you know that owning a rental property is considered to be passive income? The IRS has very particular rules for this type of activity and what can be deducted from your taxes. For those who make under $100,000 off the rent or lease of their properties in any given year, they are allowed up to 25k worth of losses/deductions from being treated as Passive Activities!
To use these passive activity losses, you have to be actively involved in your rental activities. This means things like finding tenants and working out the terms of any rentals that come up for review with an accountant who can help ensure you’re getting all possible credits for income taxes!
3) Travel Expense deductions
If you travel a lot to maintain or check on rental properties, these expenses can be deducted. License/registration fees and parking are just two examples that will help lower your taxes by getting them approved for tax deduction purposes!
With an experienced accountant, one should also leverage the latest technology like Docupile’s Cloud Storage Document Management Software that can help organize and sort all your tax and rental property-related paperwork.