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An Owner’s Guide to Rental Property Tax Deductions

Chaffee Crossing Rental Property Owner Doing Her TaxesOne of the primary advantages of owning Chaffee Crossing rental properties is that, come tax time, you may reap the benefits of deductions that other taxpayers cannot. But to benefit from these deductions, you need to grasp what they are and how to have your numbers ready before you begin filling out your return. In this guide, we will review 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

Having a thorough comprehension of your property’s common expenses is essential to optimizing your cash flows. It can also assist you at tax time since you can deduct most of them on your return. Budget expenses that are also tax-deductible consist of:

  • Repairs and maintenance. Everything you buy to maintain the condition of your property is normally a deductible expense. This includes fees paid to service providers, contractors, etc. Understand that improvements – particularly massive ones – are not deductible as expenses. Therefore, they should 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 pay for any utility service, like 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 covers whether you spend for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

On top of common expenses, there are a few other deductions that rental property owners may 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 often one of the most useful deductions for rental property owners.
  • Depreciation. Another significant deduction that rental property owners may receive is depreciation. All properties start to depreciate over time due to wear and tear. The upside is that you can deduct a certain amount for this depreciation over the life of the property. You can also get depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. Just like you can deduct expenses paid for repair work or landscaping, you can also deduct the payment to attorneys or other professionals who provide services related to the management of your rental property. Most costs associated with eviction, Chaffee Crossing property management, and tax preparation are also deductible.
  • Travel. Owning rental properties often involves a lot of back-and-forth travel, whether you live 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.

To take full advantage of all the deductions applicable to you, you must keep your property-related expenses organized and in one place. And there’s no reason to wait until the end of each year; you can start keeping track of your expenses immediately and add as you move forward. Doing it this way can make your job smoother each year when tax season comes around.


Another way to make tax time smoother is to hire Real Property Management First Choice to keep track of your operational expenses. Along with professional property management, we keep up to date with your property’s income and expenses and provide reports that can make tax time much simpler. Contact us online to learn more!

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