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9 Amazing Tax Deductions for Landlords

Tax Deductions for LandlordsHere are 9 Amazing Tax Deductions for Landlords that can help during the 2014 tax season and beyond.

No one wants to pay more than necessary for operating expenses and utilities for rental properties; however, millions of landlords are over paying taxes on their rental income. This normally happens when landlords fail to seek all possible tax deductions for their rental units. Rental investments provide more tax benefits than most other investments one could make. With thin margins, these tax benefits could mean making money or losing money on your rentals.

Here are some helpful tax deductions that landlords should pay close attention to:

Travel: Travel deductions can be made when driving anywhere locally for your investment property. Weather you need to meet with a tenant or swing by the nearest home depot, be sure to record your milage and deduct your local travels. Usually you can deduct actual expenses or your standard mileage rate depending on which is more. If you need to travel longer distances, expenses such as airfare, hotels, and some meals, can be deducted only with caution. Landlords must be sure to keep and submit copies of all receipts in case of an IRS audit.

Home Office: If you are using a room in your home as an office, this can be deducted as well. These deductions apply to all space dedicated as a work area.

Employees and Contractors: Hiring independent contractors or repair men to perform service on your rental property, is also a deductible expense.  In this case you would deduct the contractors wages as a rental business expense.

Repairs: Considering repairs are not out of the ordinary, and are in fact necesary, they are in fact fully deductible in the year incurred. Some samples of repairs that are deductible are painting, flooring, leaking pipes, plaster repairs, and broken window replacement.

Interest: Interest is really the largest tax deductible expense landlords incur. Landlords can deduct mortgage interest on loans, and interest on credit cards that were used to purchase items used in your investment homes.

Legal Services: If attorneys, accountants, property management companies, and or investment advisers are involved with your rental business, than you can deduct their fees as operating expenses as long as these fees are paid for work relating to your rental property.

Depreciation: The true cost of a home, rental unit, or other investment property is not deductible in the year it was purchased, rather, landlords get returned the cost of real estate via depreciation. Typically this involve deducting portions of the cost of the home over a few years.

Insurance: Did you know you can deduct premiums you pay for insurance on any rental activity? Flood, fire, theft and landlord liability insurance are all deductible. Landlords can also deduct the cost of health and workers’ comp insurance for all employees.

Casualty Losses and Theft: If your property suffers from severe flooding or any natural disaster, you may be a good candidate for tax deductions based on your losses. Not all of your property damages will be covered. Be sure to check with your insurance provider to determine what is in fact covered.

Hopefully these 9 amazing Tax Deductions for landlords will help you put a litter more money in your pocket this tax season and beyond.