What tax deductions are available for landlords?

November 22, 2019

Tax time doesn’t have to be painful. If you’re a landlord, there are actually several deductions that can wind up working in your favor when it comes time to file. Here are some basic tax deductions for landlords that most people who rent their property can claim.

Repairs and maintenance.

The key here is to make sure that your expenses throughout the year count as repairs and not improvements. Things like fixing plumbing problems, replacing windows or locks, and repairing the a/c all count as necessary repairs.

For tips on maximizing your repair deductions, check out this article that explains the strategy behind making small repairs instead of overhauling your entire property. 

It’s important to keep track of maintenance requests for tax purposes. Find a property management software that allows landlords and tenants to start maintenance requests online, track the status and even upload receipts- it will make doing taxes a breeze!

Insurance.

Landlords can deduct all the insurance they have on a rental property. This includes fire, theft, and flood insurance. It also covers general homeowners insurance if you have an umbrella policy. If you have any employees, you can also deduct the cost of their health insurance.

Property management assistance and legal aid.

Many landlords don’t know that you can deduct professional services rendered throughout the year. This includes things like attorneys and accountants, but it also covers any property management assistance. This covers both an on-site manager and any fees associated with managing your property (like Homeowner Association Fees).

Advertising.

Yep, you can actually deduct the money you spend on advertising your listing from your taxes. This includes any print ads, radio ads, and mailers.

Interest.

This is a big one. If you’re currently paying a mortgage on a rental, you are able to deduct all the interest accrued. If you took out any loans for repairs, you can also deduct the interest you paid on those. For a more detailed breakdown of how to determine what kind of interest is eligible, check out this article.

Travel.

If you don’t live near your rental property, you can deduct all the travel expenses associated with rental business. That includes airfare, car rentals, and hotels. If you do live close to your rental, you can still deduct gas and mileage from driving associated with repairs or other landlord business. Check the IRS website for current rates and instructions on how to deduct your mileage correctly so you don’t get audited.

Your office.

Whether you work from home or rent out an office space, you can deduct those expenses. It’s more complicated to figure out the amount to deduct if you have a home office (you’ll need to determine how much square footage is solely used for work, what percentage of your internet is used during work hours, and which supplies are used strictly for work), but the deduction can be a big one.

For more guidelines on claiming landlord expenses,  this section of the IRS website can be helpful.

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