One of the main and most common deductions that landlords can claim on their tax returns is for repairs, maintenance, and improvements to their property. The IRS has published guidelines on what qualifies for this deduction. It is important to note that deductions differ for all three. Here are the differences:
For replacements and improvements:
As a landlord, you spend a lot of time traveling from home to your property. Travel expenses related to the management of your property can be deducted from your tax returns. However, you must keep in mind that qualifying travel expenses have to be related to your business in some way. Personal travel expenses for leisure activities are not allowed. If you qualify for a travel expense deduction, you can do so in either of the following:
In addition, some overnight travel expenses may also qualify for this deduction. If you own rental property in a different state and are traveling via plane or other forms of transportation, you will be able to deduct this cost on your tax return. Likewise, you’ll be able to deduct the cost of hotel accommodations and any other expenses such as business meals with clients, business partners, tenants, or other business associates.
We recommend that you keep track of all of your travel expenses and make sure that you can justify them as a business expense. If you can’t, then it’s probably best not to include it as a deduction in your tax return.
You as a landlord are responsible for the upkeep and general maintenance of your rental property. However, it’s impossible to do it all by yourself. If you’ve hired independent contractors such as plumbers or electricians, you’ll be able to deduct their wages on your tax return. In addition, you can also deduct the cost of any material you needed to purchase for them to complete your job. For example, if you purchased new piping for the plumber to install or new wiring for the electrician to connect, those are both qualifying expenses.
You can also deduct the salaries of anyone working for your property such as a front desk manager or doorman.
Being a landlord already comes with enough daily tasks. Let us take care of your tax needs while you take care of your property. Contact us today.