As a landlord, you operate and maintain numerous properties for commercial profit. This makes you a small-business owner according to the law. As such, you will be required to file taxes associated with the income of your business. Fortunately, there are several tax-deductible expenses that you are likely to come across during your time as a landlord. To save you from paying a higher annual fee than you have to, let’s take a look at some maintenance and travel expenses that come with a tax break.
- Repairs. While the landlord is typically held responsible for fixing anything that’s broken or operating incorrectly, the good news is that you’re entitled to a tax deduction for the cost of repairs.
- Maintenance. Maintenance is different from repairs in that the goal is to avoid the expense of repairs as much as possible. This includes safety inspections, updating appliances and amenities, and landscaping.
- Utilities. Paying for the electricity and water in your own home is one thing, but paying for these same utilities in a rental property is another thing entirely. Oftentimes, tenant rental fees will at least partially offset the cost of utilities. But the added bonus of a tax deduction makes your business much more lucrative.
- Travel. Now, this doesn’t mean a discounted vacation to just anywhere in the country or the world at large. But a landlord will occasionally need to make a trip to check in on their properties and their tenants. Whether traveling nearby or halfway across the country, these trips cost money, and the costs can add up very quickly.
- Insurance. Once again, this applies specifically to the insurance plans tangential to your rental property or properties. Most landlords take out coverage for natural disasters (flood, fire, etc.) and loss (burglary, theft, etc.) While these insurance plans can be expensive, they can bring significant peace of mind, and a tax deduction will lower the cost considerably.
- Legal Fees. This is particularly useful if you should ever be forced to hire an attorney. For example, you may need to evict a tenant on legal grounds, and an attorney can offer valuable advice. Fortunately, the expense is offset by tax a tax break.
When considering all the costs that go into owning and managing property, it may seem overwhelming. Surely your wallet can’t handle the financial strain? But luckily, as a small business owner, you are entitled to several tax deductions. Begin with the list above and research ways to save money when it comes to everyday expenses.
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