Owning and managing DC rental properties is a great investment
Regardless of how much you depend on the income from your rental properties, knowing their associated tax deductible expenses will save you time (and money!) both in the short and long term. Here are the major available deductibles that you are able to benefit from each year. Note: Consult your tax professional for all real estate investment deductions you may qualify for.
You are able to receive tax deductibles for the cost of the rental property over a number of years. So, you still have to obviously pay for the rental property, but the deductible is there to help you make some of that back over a set number of years. This helps compensate with any additional expenses that come up over those years, as well as location changes that may influence the value of the home.
If you are currently paying off a loan for a rental property, you can deduct the loan’s interest each year. So, if you are concerned about investing in multiple rental properties, keep in mind the interest being deducted. Under the same category, if you borrowed or used any money to make improvements on the rental property, you are able to also deduct that accumulating interest.
Repairs & Hired Help
Any cost for unexpected or expected repairs that were necessary for the rental property can be deducted from your taxes. This includes hiring a professional to fix something in a day, or a large plan to renovate part of the rental property. All of this cost can be deducted within the year that the repairs happen. Examples of repairs include repainting, fixing leaks, and replacing flooring.
If you own multiple properties, and are hiring professionals to help make adjustments, keep track of everything. In order to receive the income tax deduction, you have to show the various repair details amongst the rental real estate you own and manage.
Insurance, Theft, & Various Others
As a rental property owner, you are able to deduct various personal expenses in relation to these properties as well. For example, you are able to deduct insurance premiums, home office expenses, and even travel. Do not forget that along with deducting insurance, you are can deduct part of the damage that may happen from natural disasters that either damage or destroy your properties.
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