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An Owner’s Guide to Rental Property Tax Deductions

Theodore Rental Property Owner Doing Her TaxesOne of the prime advantages of owning Theodore rental properties is that, come tax time, you can make the most of deductions that other taxpayers cannot. But to benefit from these deductions, you should first comprehend what they are and how to have your numbers ready before you start filling out your return. In this guide, we’ll talk over the tax deductions that rental property owners can utilize and how they can help reduce your tax liability every year.

Common Expenses You Can Deduct

Knowing your property’s common expenses is vital to optimizing your cash flows. It can also aid you at tax time since you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. Anything you pay to maintain the condition of your property is usually a deductible expense. This involves fees paid to service providers, contractors, and so forth. Bring to mind that improvements – specifically large ones – are not deductible as expenses. Rather, they must be amortized as capital improvements instead.
  • Insurance. Insurance premiums for your landlord insurance policy, including any fire, flood, or personal liability insurance, are deductible expenses.
  • Utilities. You can deduct utility payments on your tax return if you give payment for any utility service, such as water, garbage, electric, or gas. Utilities paid by your tenants are not deductible.
  • Advertising. Any money you spend to market your property and/or find a new tenant is a deductible amount. This includes if you pay for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

In addition to common expenses, there are a handful of other deductions that rental property owners can take to help reduce their tax liability. These tax deductions include:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is always one of the most valuable deductions for rental property owners.
  • Depreciation. One more excellent deduction that rental property owners can claim is depreciation. All properties are likely to depreciate over time due to wear and tear. The plus point is that you may deduct a certain amount for this depreciation over the life of the property. You can also claim depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. You may also deduct expenditures paid to attorneys or other professionals who provide services related to the management of your rental property in the same way that you can deduct expenses paid for repair work or landscaping. Most costs associated with eviction, Theodore property management, and tax preparation are also deductible.
  • Travel. Owning rental properties usually requires a lot of back-and-forth travel, whether you are in another state or only a few miles away. Those business-related miles can add up over a year and are deductible on your tax return. Just keep a log of your travel miles and any other travel-related expenses.

It is critical to keep your property-related expenses organized and in one place if you want to take full advantage of all the deductions available to you. And there’s no reason to sit until the end of each year; you can start keeping track of your expenses immediately and add as you go along. Utilizing this approach can make your life less difficult annually when tax season comes around.


Working with Real Property Management Azalea City to monitor your operational expenses is another technique to make tax time easier. On top of professional property management, we keep track of your property’s income and expenses and provide reports that can make tax time more trouble-free. Contact us online to learn more!

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