Tax Tips for Landlords

Tax season is right around the corner, and it’s easy to see this time of the year as nothing but a hassle. However, tax time actually presents an opportunity to take advantage of deductions and increase your profit margin. More than likely, you’re paying more than you should be. With a little time and effort, you can earn more from your rental property investment. Still, you may be wondering exactly what you should be focusing on when it comes to deductions. That’s why we’ve provided a few tax tips to get you on the right track.

Tax Tips for Landlords

  1. Repairs Pay Off

As a landlord, the number of repairs you do add up over time. You may not be aware, but you can deduct repair expenses for your rental property in the year they are sustained. A repair refers to anything that restores the original condition of the property. Painting the walls, for example, or fixing leaks and windows would count as repairs. The total cost of improvements such as upgrading appliances, on the other hand, cannot be deducted all at once. The value is spread out over a span of years, so an annual deduction would have to be made. After any repairs or improvements are completed, make sure you keep all necessary documentation for your taxes.

  1. Claim a Home Office

Of all the tax tips for landlords, this one might be the easiest to forget. In the day-to-day shuffle, landlords spend so much time working that they often forget where they work can be a deduction itself. If you use an area of your home for business operations related to your rental property, you can claim it as a home office. There are two basic ways to calculate this deduction: divide the square footage of your office by the square footage of your entire home, or record the number of rooms it contains versus the number of rooms in your home.

  1. Keep Track of Mileage

You may not think that vehicle mileage is an important thing to keep track of, but this couldn’t be further from the truth. As far as tax tips go, this one is a must. After all, you probably use your car to show potential renters around, purchase supplies, and collect rent payments. All you have to do is make note of how much mileage you use for business-related activities. From there, calculate the percentage of mileage you used versus the total mileage of your car. Use this percentage point again to determine how much of your total vehicle expenses (gas, repairs, insurance) should be deducted.

How All County Denver South Can Help

Need more tax tips? All County Denver South Property Management is here to help property owners have confidence in the quality of their tenants and the security of their property through knowledgeable and trustworthy property management services. From managing tenant relationships to lease enforcement, we look forward to working with you to see how your investment can be a long-term, stress-free asset. For a complimentary quote or more tax tips, call us today at (720) 664-4550.

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