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An Owner’s Guide to Rental Property Tax Deductions

Buhl Rental Property Owner Doing Her TaxesOne of the best advantages of owning Buhl rental properties is that, come tax time, you can take advantage of deductions that other taxpayers cannot. However, to benefit from these deductions, you have to determine what they are and how to have your numbers ready before you begin filling out your return. In this guide, we will deliberate the tax deductions that rental property owners may claim and how they can help reduce your tax liability every year.

Common Expenses You Can Deduct

Establishing a thorough grasp of your property’s common expenses is crucial to optimizing your cash flows. It can also support you at tax time because you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. All you pay up to maintain the condition of your property is usually a deductible expense. This contains fees paid to service providers, contractors, and all that. Take into consideration that improvements – mainly big ones – are not deductible as expenses. Instead, they should be amortized as capital improvements.
  • Insurance. Insurance premiums for your landlord insurance policy, including any fire, flood, or personal liability insurance, are deductible expenses.
  • Utilities. You can deduct utility payments on your tax return if you spend on any utility service, for instance, water, garbage, electric, or gas. Utilities paid by your tenants are not deductible.
  • Advertising. Any money you spend to market your property and/or find a new tenant is a deductible amount. This includes whether you spend for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

Besides common expenses, there are a couple of other deductions that rental property owners may utilize to help reduce their tax liability. These tax deductions are:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is normally one of the most rewarding deductions for rental property owners.
  • Depreciation. Another excellent deduction that rental property owners can get is depreciation. All properties are likely to depreciate over time due to wear and tear. The advantage is that you can deduct a certain amount for this depreciation over the life of the property. You can also deduct depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. Just as you may deduct expenses paid for repair work or landscaping, you can also deduct funds spent on attorneys or other professionals who handle services related to the management of your rental property. Most costs associated with eviction, Buhl property management, and tax preparation are also deductible.
  • Travel. Owning rental properties typically entails a lot of back-and-forth travel, whether you live in another state or only a few miles away. Those business-related miles can add up over a year and are deductible on your tax return. Just keep a log of your travel miles and any other travel-related expenses.

It’s imperative to keep your property-related expenses organized and in one place if you want to take full advantage of all the deductions provided to you. And you don’t need to sit out the rest of the year; you can start keeping track of your expenses immediately and add as you make your way. Doing it this way may simplify the process yearly when tax season comes around.


Another solution to make tax time simpler is to connect with Real Property Management Magic Valley to manage your operational expenses. Aside from professional property management, we keep track of your property’s income and expenses and provide reports that can make tax time much more convenient. Contact us online to learn more!

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