With the April 18th tax deadline coming up in just a few days here are some landlord deductions that you don’t want to miss:
File on schedule. There’s no use in paying silly penalties and interest. You’ve got properties to run!
You can find more information on e-filing or request an extension directly on IRS.gov
For more detailed information contact your CPA.
Additional Resources:
https://www.irs.gov/uac/IRS-Tax-Tips
https://www.irs.gov/uac/Try-IRS-gov-The-Site-for-Tax-Help
-
Interest: The largest expense. No landlord should ever miss this one but it’s too important to leave off!
-
Depreciation: A landlord’s favorite deduction! You can deduct a portion of the cost of the property over several years. If you’ve run out of depreciation, call us today to find out what your options are in today’s market
-
Utilities: If you as the landlord pay for utilities, they can be deducted from your taxable income.
-
Local Travel: Landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity.
-
Long Distance Travel: Travel expenses related to your rental property (ex. airfare, hotel bills, meals,etc.).
-
Casualty: Have you had any damage or has your property been destroyed (by an event like fire or flood)?It's possible that you may be able to obtain a tax deduction for all or part of your loss.
-
Legal Services: Fees paid to accountants, attorneys, proeprty managemnent companies (as long as they are related to your rental activity may be deducted.
TAX DEDUCTIONS LANDLORDS DON’T WANT TO MISS
-
Home Office Deduction: Certain expenses that are associated with your home office or place of business for your rental properties can be deducted from your taxable income as long as they meet the requirements by the IRS.
-
Repairs: Include any necessary and ordinary property maintenance you have done (re-painting, fixing broken glass, etc.), as long as they are within a reasonable amount.
-
Insurance: Premiums you pay for almost any insurance for your rental activity may be deducted.
Tax time is a great opportunity to understand the return on equity.
Your options in today's market are to:
1. Sell or exectute a 1031 exchange: Underperforming assets can be transitioned into better performing assets by
repositioning your equity or cashing out.
2. Buy more property: Building or adding to your portfolio.
3. Refinance: Whether you want to lower your monthly mortgage expenses or you want to cash out - Refinancing may be the best option for you.
Have more questions or desire a property evaluation? Contact us today!
April 14, 2016
What is a 1031 Exchange?
An exchange is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.
When is a 1031 exchange right for you?
When your RETURN ON EQUITY in the current market is higher than the return on equity with your current investment.
Call us today to help you calculate your return on equity! Click Here For more details