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An Owner’s Guide to Rental Property Tax Deductions

Stone Oak Rental Property Owner Doing Her TaxesOne of the primary advantages of owning Stone Oak rental properties is that, come tax time, you can reap the rewards of deductions that other taxpayers cannot. However, to benefit from these deductions, you must first learn what they are and how to have your numbers ready before you start filling out your return. In this guide, we will take a look at the tax deductions that rental property owners may get and how they can help reduce your tax liability each year.

Common Expenses You Can Deduct

Establishing a great understanding of your property’s common expenses is critical to optimizing your cash flows. It can also assist you at tax time since you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. Anything you buy to maintain the condition of your property is usually a deductible expense. This includes fees paid to service providers, contractors, and so forth. You need to understand that improvements – particularly large ones – are not deductible as expenses. Instead, they have to 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 enroll in 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 covers anything you spend such as on a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

Other than common expenses, there are a handful of other deductions that rental property owners may use to help reduce their tax liability. The following is the list of tax deductions:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is often one of the most significant deductions for rental property owners.
  • Depreciation. Another huge deduction that rental property owners can claim is depreciation. All properties are expected to depreciate over time due to wear and tear. The positive side of things is that you can deduct a certain amount for this depreciation over the life of the property. You can also take depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. Just like you can deduct expenses paid for repair work or landscaping, you can also deduct money paid for attorneys or other professionals who offer services related to the management of your rental property. Most costs associated with eviction, Stone Oak property management, and tax preparation are also deductible.
  • Travel. Owning rental properties generally includes a lot of travel here and there, whether you reside in another state or only a few miles away. Those business-related miles might 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 is crucial 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 there’s no need to wait until the end of each year; you can start keeping track of your expenses immediately and raise them as you go. Doing so might make your life smoother every year when tax season comes around.


Another good idea to make tax time smoother is to partner with Real Property Management Campanas to monitor your operational expenses. In addition to professional property management, we keep an eye on your property’s income and expenses and provide reports that can make tax time more comfortable. Contact us online to learn more!

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