You should be informed of the different important tax deductions available to landlords in order to reduce your taxable income and increase your profitability. Tax deductions are often requested for the tax year in which the costs were incurred. It is essential to seek the guidance of a tax expert or accountant to make sure you comprehend the precise guidelines and conditions for each deduction and that you maximize your benefits within the bounds of the law.
On the other hand, non-allowable tax deductions are costs that cannot be deducted to lower taxable income. Things like vacations, new clothes, and groceries are examples of non-rental property-related personal expenses; as well as:
- Monthly mortgage payments. While mortgage interest and property taxes are both deductible, loan principal payments are not.
- Even when the entertainment is connected to your business, entertainment costs are not deductible. Business dinners, on the other hand, are still deductible, though the restrictions have changed under the new rule.
- Business gifts valued over $25 and given to any one person during the tax year are not deductible.
- Club dues, such as subscriptions to gyms, country clubs, or other clubs, are not deductible even if you are entertaining for business purposes.
- Capital improvement costs such as installing new windows or a new roof on your rental house, must be depreciated not deducted.
- Other taxes, including state income taxes and local sales tax. These should be included in your personal income tax return.
- Fines and penalties, such as those levied by the IRS for underpayment of a prior year’s taxes and late payment fines.
- Political contributions, including anything spent on lobbying costs or campaign events.
- Home office space unless it is used exclusively for business purposes. Even having a family computer in the room may mean that your home office deduction is disallowed.
Income tax deductions, in the end, might be complex and difficult to grasp. While a tax expert is your best bet for advice on any issues or queries with your taxes, there are things you can do to make the most of your time and money. If you choose Real Property Management Midlands, we’ll make sure you’re keeping track of everything that can be deducted from your taxes, avoiding any guesswork.
Our West Columbia management staff is here to help you claim every lawful tax deduction and avoid any issues with the IRS that could arise as a result of failing to comply with their regulations. With our assistance, you may prepare yourself for success during tax time and all year long. For additional details, please contact us online or at (803) 403-8838.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.