It’s that time again to start gathering all of the documents needed to file your taxes.
Whether you are new to filing taxes as a landlord or have been so for a while now, it is always good to know what you can claim, especially since rental real estate offers more tax benefits than any other investment.
Below are some helpful tips that will assist you in getting the most out of your tax refund this year.
Common Expenses for Landlords in York, PA That May Be Tax Deductible
Whether you have to travel locally or for an overnight trip to conduct business for your rental property, portions of your travel are tax deductible.
Keep track all of all of your mileage, tolls paid, and hotel accommodations related to business purposes including purchasing of supplies, showing the property to potential renters, or even simply picking up a rent check.
This is a landlord’s single largest deductible expense and forgetting to include it in your tax return can make the difference between profit and loss for most landlords.
“Mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity are common examples of deductible interest” according to Nolo.com.
For more examples and information, read Deducting Interest on Rental Property.
Homeowners Association Dues
If you are paying a fee associated with an HOA property, those fees can be fully deducted as a business expense.
Most landlords use a home office or at least a space in their home to conduct their business purposes. Therefore, you can claim a portion of your housing expense against your rental income.
According to Intuit TurboTax, “for 2016 the prescribed rate is $5 per square foot with a maximum of 300 square feet.”
The premiums you pay for almost any type of insurance related to your rental property can be tax deductible. Examples include: fire, theft, flood, and even health insurance if you have employees.
Losses or property damage
If there is damage to your rental property from natural disasters such as flooding or fire, you may be able to claim a portion of that loss.
The amount deducted depends upon the amount of damage and whether it was covered by insurance.
Often when renting out a property, landlords include some utilities in the rental price.
Any utilities that are paid by the landlord of the property are considered tax deductible expenses and can consequently be claimed on your tax return.
Repairs to the property
Repairs and maintenance costs can be expensed in the year that they occur.
Any items that include maintaining the property or restoring the property back into its original condition is considered a repair, whereas improvements increase the value of the property.
Anytime you hire a professional service to help in conducting business purposes, you can claim those services on your taxes. For example, whether you hire a lawyer to help with drafting leases or hire a cleaning service to prepare for new tenants, these are deductible services.
Hiring a property management company in York is also a tax deductible service and one of our key points to the Benefits of Hiring a Property Management Company.
Improvements made to properties require you to expense the cost over a few years through depreciation. The purchase of real estate rental property is also considered a deductible tax expense through depreciation.
For more information on HOAs and other services York H-G Properties can assist you with, contact us today!
***We are not an accounting or legal firm. Some of these tax tips will vary by state. Please consult with an accountant if you have questions regarding any tax related questions.