Once that tax time rolls around most people are scraping the barrel looking for deductions so they can save just a little bit of money. Landlords are lucky in a way because they have? a lot of built in deductions with their rental properties, the problem is a lot of landlords and property managers forget to take some of their most basic tax deductions.
Interest can add up to a huge tax deduction if you keep good records. Interest doesn’t only mean the interest you’re paying on your mortgages, but it also refers to any interest on loans you’ve taken to improve the property. Interest can even go a bit further to include interest charged on credit cards for items purchased for your rental properties.
The cost of your rental unit(s) are not deductible in the year in which you pay for it, instead you deduct a portion of the cost of the property over several years. This is how you recoup the cost of your property through real estate.
Not only is the interest charged on repairs deductible, but the repair costs themselves are as long as the repair is warranted. Keep careful track of these expenses as you can only use them in the year that the repair occurs.
If you’re still trying to find some deductions for your rental property, contact a tax specialist as there are many of them out there just ready to help you cut your tax bill.