Real estate investing, especially landlording, can provide you with many tax benefits. Are you ready to claim yours?
For example:
- Do you use the internet to search for properties? Do you read the classified ads in the local paper? Do you buy notepads, folders, pens, etc? These are all business expense deductions.
- Do you work out of your home? You may qualify for a home office deduction.
- Do you “drive for dollars” with your car? Do you travel to and from your rental properties to show them to possible tenants or do maintenance? You may be able to claim the car mileage deduction.
- Did you need to make some repairs? Of course you did, you are a landlord! Those repairs are likely deductible.
- Rental income for the most part is not subject to self employment (social security or Medicaid) taxes.
- Plus the biggest bonus of all, depreciation.
All of these deductions came before you even take your standard deduction and other exemptions, significantly reducing your adjusted gross income and the amount of income tax you owe.
There are many more tax benefits that real estate investing offers. These can include such things like “real estate professional” classification and cost segregation.
Taxes however, make a lot of people nervous. But they should not. Taxes are not rocket science. Taxes are really are just some basic accounting along with some addition and subtraction. I have done my own taxes and while they are time consuming they are not that difficult to do.
Two things have really helped me understand taxes.
- I am no CPA, but I have one that I can call upon if I hit a road block. She has experience working with real estate investors and understands my business. Where did I find her? At my local REIA group.
- This book has been a great help. If you are new to landlording, have a couple of properties or a couple of dozen, Every Landlord’s Tax Deduction Guide can really help you. It is written for you, the investor, not the accountant. It will help you make sense out of income taxes. I cannot recommend it enough. Click on the link and order it today (I do get a small commission on every order, just so you know, but I really do think the book is worth every penny)!
Better hurry though. April 15th will be here before you know it. Are you ready?
You know, I am a cheap skate…BUT, I actually went and purchased this book. Thanks for taking the time to read the content, and recommending it! You saved me some time. Another book thats really good is Rich Dad’s Guide To Tax Free Wealth. I will share this with my blog audience.
Thanks Lisa. The book is a big help. I refer to it throughout the year actually as I make business decisions. I hope you find it helpful!
Kevin