Nicole Rollins

Items That Can Be Written Off For Rental Properties

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The matter about tax reduction and relaxation should be discussed with a professional licensed accountant. However, there are a few things that you should know about in order to write off the items that are the part of rental properties.

The tax season may be an unpleasant term for most of the business persons, but not for one group that involves people related to rental business. In a perfect, where imposition of laws and regulations is not affected by any flaws, the tax season is actually a beneficial time for the rental business owners. With that said, it is worth mentioning the reasons why rental properties enjoy so many tax benefits.

  1. IRS considers income from rental properties as passive. According to law, passive incomes should be treated favorably.
  2. Investment in rental properties appreciates and depreciates at the same time. Appreciation means the increasing value of your property. On the other hand, depreciation is associated with the IRS assuming the continued process of wear and tear that happens with your property. While appreciation helps you to keep the profit due to increased value, depreciation helps you to get tax relaxation.

In order to make the rental property entirely tax free, here are a number of items that you can write off. The items that I am talking about are the ones that are meant to generate the profit that ultimately gets reduced due to taxes. Thus, if you are able to write off those items, you can save a lot of money.

Items that can be written off

There are about 25 major items that you can write off for rental properties in order to decrease the amount that you give as taxes.

  1. Management fees (e.g. property management)
  2. Homeowner’s association (HOA) or condo fees
  3. Utilities
  4. Insurance
  5. Property taxes
  6. Pest control
  7. Landscaping
  8. Mortgage interest
  9. Other interest
  10. Bank fees
  11. Supplies
  12. Education/professional development
  13. Licenses/permits
  14. Leasing fees
  15. Legal & professional fees
  16. Office/telephone
  17. Postage/shipping
  18. Travel
  19. Meals & entertainment
  20. Automobile/car expenses
  21. Repairs
  22. Appliances/fixtures/equipment
  23. Minor improvements
  24. Major improvements/new assets
  25. Depreciation

Ask a tax professional

The discussion about how to write off the items may be a boring talk but you need to understand every bit of detail if you really want to make money from your rental properties. For this purpose, you can consult a person expert in the matters of taxing. As bonus information, which we too consider as bonus because we are not tax experts, there are some general guidelines for getting a few things written off.

For instance, if one of your rental properties is located out of city, the only way you can manage that property is visiting the place quite often. Since there will be traveling involved in the process, you can ask for the write off in order to get compensated for the traveling expenses by getting a subsidy on traveling.

Write-offs are great. In fact, this is one of the most important aspects that actually make your rental property investment a truly successful real estate investment.

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