Did you know that with the help of Wright Property Management Group, LLC, you can write off fees related to owning and renting your property? Here are some tax deductions associated with owning rental properties that you may qualify for:
TRAVEL You can deduct your travel expenses related to your rental properties. If you do the upkeep on your own Wright Property Management Group rental property, you have done a lot of driving to mow, repair, and do general maintenance on your properties. If you live out of the area and are using a us to look after your property, you can still deduct travel expenses such as flights, rental cars, and hotels should you decide to come visit your property. There are two ways to calculate the amount you deduct on vehicle expenses. You can deduct the actual amount spent on gas, repairs, and maintenance on your vehicle(s) or you can use the IRS mileage rate, which is currently 55.5 cents per mile. You must use the same method year after year, so you should consider which would give you more deductions.
Depreciation is a large part of what you can deduct from taxes on your rental property. Since you can’t deduct what you paid for the unit or any improvements you might make, the IRS allows you to deduct what is more or less the yearly wear and tear, or the yearly reduction in value, as something called depreciation. This is calculated as the cost of the building (excluding land) divided by 27.5, since the IRS decided it would take 27.5 years for the building to either be rebuilt or completely repaired.
INTEREST Unless you paid the entirety of your rental property’s cost upfront, you probably took out a mortgage in order to purchase it. The IRS will let you deduct the interest payments on this loan. This will be an enormous deduction that simply cannot be overlooked. To illustrate, let’s say you took out a $200,000 loan with a 30-year term. You paid 20% as a down payment ($40,000), and the loan’s interest rate is 4.5%. By the time you finish paying off your loan, you will have paid $226,850 in interest-more than the original cost of the property. This is all tax deductible in the year the interest is paid.
INSURANCE Insurance premiums for your rental property, such as homeowners or flood insurance may be deducted from your taxes.
HIRING PROFESSIONALS Your monthly Wright Property Management Group service fee and maintenance charges are tax deductible. Fees for other professional services such as an attorney, accountant and tax preparation are also tax deductible so be sure to maintain accurate records.
[DISCLAIMER: Wright Property Management Group, LLC is not an accounting firm nor are any of its associates licensed CPA’s. This article is provide for information purposes only and you are encouraged to seek the counsel of an appropriately licensed tax professional]