Tax Deductions for Rental Properties
Claiming all the necessary tax deductions and credits on your tax return is your right as a taxpayer. Yet, not all rental landlords and property managers keep excellent records.
If this is you, there is a simple solution to claiming your deductions and avoiding penalties — it’s to use a property accounting software to record and attribute deductions precisely.
When you must complete your tax forms or your accountant does, you’ll be confident you’ve done your taxes as well as possible. Using a viable property management accounting solution will help with your strategy to minimize tax owing and avoid an audit from the IRS. You can also learn more about property tax strategy in property tax management books.
Taxes are a Major Cost/Liability
Let’s take a quick look at 20 tax deductions for landlords and property managers that will help you protect your earnings in 2022/2023:
- interest on mortgage payments and other loans
- pass through, De Minimis safe harbor deduction (including furniture, appliances, gardening equipment)
- tenant acquisition and business advertising costs
- maintenance, repairs, inspections and cleaning
- landlord and property management insurance policies
- local license fees and charges
- IRA/401k contributions
- health savings account contributions
- property taxes
- equipment depreciation
- equipment rental fees
- contractor fees
- company car/truck insurance, fuel, toll road fees, and travel costs
- meals and entertainment
- computers, internet service fees, SaaS software subscriptions, and Proptech tools
- office rent, supplies
- staff wages, training, certification fees
- convention attendance
- professional fees for Realtors, tax accountants, lawyers, and home inspectors
Let Your Software Keep Reliable Records
Property managers can keep good records of your business activities including keeping invoices, receipts, auto mileage, utility bills. Use your property management software to record business income and expenses, and attribute costs according to agreements on leases, and between all your owner clients as per contracts. Your accountant will be pleased and landlords will be impressed.
Many SaaS property management solutions have weak accounting functionality and no tax management capabilities.
Financial and tax matters are considered external to most property management solutions. However, you’ll enjoy using ManageCasa’s professional level accounting platform to present your income/expense documents to your tax accountant and financial advisor to aid in good tax decisions.
Being unorganized and undocumented invites financial losses, fines and other penalties from the IRS. Your company’s brand reputation and your property manager certification might be in jeopardy too if you’re found to be professionally negligent.
Your property accounting software is your best assurance you’ve got all your expenses and income recorded and properly attributed to the correct accounts.
Learn more about ManageCasa’s outstanding property accounting software features now.
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