- Property advertising and marketing expenses
- Cleaning fees paid to professional companies between tenants
- Professional property management company fees
- Premiums paid for fire, theft, flood, liability, employee health, and workers compensation insurance
- Legal and professional fees paid to attorneys, accountants, and real estate investment advisors
- Interest payments on the mortgage, and credit cards used for rental activities
- Utilities you pay as the property owner
Commonly Neglected Deductions
Being the leader in property management, we created a list of Raleigh rental property tax deductions often overlooked by property owners. So obtaining knowledge about these deductions makes that difference between you acquiring a significant rental property profit or losing earnings.
Costs for Local Travel
Driving to the hardware store to pick up parts needed to repair kitchen sink leaks? Driving by your rental property for an evaluation? Remember to track the miles driven in your car since these can be tax deductions in either one of these two methods:
- Use the exact amount paid (for gas, upkeep, and repairs on the vehicle).
- Use the standard mileage deduction provided by the IRS.
Repair Expenses
Property owners must be cautious when claiming deductions on repair costs because the IRS organizes repairs and improvements into different areas. Repairs are defined as things that maintain the property’s good working condition. This area involves the replacement of things such as broken windows and fixing leaky faucets. However, if you consider replacing all windows with a double-paned or energy-efficient glass, then this task falls under the improvement category. As a result, this extends the property’s life for years. Improvement costs undergo depreciation, whereas repair expenses are deductible.
Depreciation
Landlords recover their expenses from obtaining a real estate property through the depreciation of the property. Depreciation allows them to deduct a small portion of the costs on a period of many years. Depreciation begins when the home is rent ready, occupied or not. It ends during recovery of the home’s cost or when you stop renting the property out.
Theft and Casualty
Natural disasters or theft results in rental property damage and loss, but you can deduct taxes from a portion of your loss. The amount deductible depends upon how much of the property was damaged and how much the insurance can cover for the loss.
If you would like more information about our property management services, please contact us today.