Now is the time to save money;tax time is near. Landlords and taxes both are at times despised and are seldom loved for all the goodness they likewise do. Therefore these two life necessities have a lot in common, although they themselves are at odds with each other when one says you owe me, hand it over’ and the other says, not so fast’.
You as a landlord cries on the shoulder of the IRS representative and, believe it or not, he listens. (Turns out he also has rental property and he understands.) He hands you some booklets and tells you to read them and to learn ways you can save on your income taxes. You read and you are aghast to learn you have been paying more than you should.
Ways to lower taxes on rental properties:
Landlords have at their disposal more tax benefits than most all other investments; yet not everyone takes advantage of them. Just think of all the repairs that must be done and all these are valid deductions. The IRS is not going to fault you over replacing leaking roofs, or making upstairs balconies secure.
They will gladly glide over that deduction. Whatever you do to improve houses that you rent of others is a good solid deduction. Even the gasoline and the other traveling expenses incurred while driving distances to check on your rental properties are accepted as deductions. Interest that must pay on the loans that you borrowed to get the money to afford the repairs and the improvements are also deductible. The depreciation value is also a tax deduction. Anything that has to do with your maintenance of your real estate rentals is usually a plus for you when it comes to paying taxes.
Ways in which you as a landlord can become friendlier with your tax representative:
You have been lax in record keeping. A few miles to that house to listen to complaints and to placate unfriendly neighbors and the cost of gasoline are negligible. Fifty cents for gasoline over a month adds up. This one place has cost you in that time about fifteen dollars out of your pocket. By the time income tax comes around next year you will have forgotten about it.
Had you kept daily accurate records, your accumulative little expenses could have saved you a few dollars on taxes. Why you failed to record this has to do with time. You were busy and did not take the time to record these small transactions. A great way to get around this is carry a small recorder in your pocket and record your estimates. Have your secretary make use of these notes.