Top 5 Tax Deductions for Landlords

Continuing the previous article on tax deductions for landlords we come to the final five tips. If you have a portfolio of Naples luxury rentals or Port Royal rentals then you will be dealing with large figures each month. Knowing what and how to deduct from your tax burden could save you a significant portion of your revenue. This tips are not designed to supplant good financial advice, just put you more in the picture about what you can and cannot claim for during the tax year.

Home Office. While many larger landlords or rental companies have offices, some smaller operators work from home. Did you know some of the running costs for these home offices can be deducted from your taxable income? There are a few rules which need to be understood in order for you to claim for these costs but are well worth researching if you have a home office. It not only relates to office space, but workshop or garage space if it’s used directly for the business.

Theft and casualty losses. All business incur losses of one kind of another. Sometimes you can take the cost of such an even off the tax burden. If a disaster befalls one of your properties, like hurricane damage or flooding you can often claim the expense of these as a deduction on tax. The amount you can claim depends on how much damage was done and how much will be recouped by insurance. If you find yourself out of pocket after the insurance, this is generally the amount you can take off in tax. The same for if a tenant steals items, or a furnished property is burgled. Whatever the insurance doesn’t cover can be written off in tax.

Insurance. Insurance is a necessary evil in our business, but you can offset the cost by claiming the premiums as an operating expense. While it’s essential to carry as much insurance as you can, it’s nice to know you can claim the costs back in tax.

Professional Services. That would be for attorneys, accountants, management companies, advisors and other professionals. As long as their services are related to your business you can claim them back. Naples luxury rentals are going to be high class, so the services of a good lawyer is going to be essential, because you can guarantee your tenants will have one if there are problems. If the tenant can afford a Naples or Port Royal rental then they can afford a good lawyer. Make sure you’re equally protected at all times, then claim the expenses back on tax.

Employees and contractors. You may or may not be of a size to need employees, but you will probably use contractors of one kind or another during the year. Any expenses incurred in hiring someone to perform services for the rentals is a deductable expense. Whether they are employed by you, or merely contracted the deal is the same.

So there are the 10 most popular tax deductions you need to be making in your leasing business. Your accountant may have covered all these bases for you, but by being aware of them you can make doubly sure.

Related posts:

1. Ten Ways to Reduce Vacancy in Luxury Rentals
2. Preparing Your Naples Luxury Rental for Occupancy