photo credit: kozumel
Getting all the appropriate tax deductions is an important part of managing a property. You want to be sure that you’re getting the deductions you deserve and that you’re spending your money wisely throughout the year.
In addition to interest, depreciation and repairs you can also claim deductions for travel, your home office and related business expenses, any employees or independent contractors you hire, casualty and theft losses as well as insurance.
Also, if you’re doing improvements you can deduct your expenses and if planned correctly you may be able to deduct them in a lump sum rather than spread out over several years. Segmented depreciation is another way to organize your property in order to take advantage of the greatest deductions. Small landlords get some extra breaks when it comes to losses so make sure you’re figuring this into the equation.
If you’re renting a vacation home look into your local laws, in some places you can do this totally tax free. But in other renting news, if you?re renting to family and friends it?s possible to lose virtually all of your tax deductions.
If you decide that these tax issues a too overwhelming, then hire an attorney or a tax professional and remember to deduct that expense as well.