It’s hard to believe, but it is time to start thinking about filing taxes again. As an investment property owner in Florida, you may be able to take some significant deductions, which in turn can help you to keep more of your earnings in your pocket, rather than in Uncle Sam’s.
With all of the changes that the COVID-19 pandemic has brought about, though, there may be a few differences for your 2021 tax return, too, as compared to those from previous years. Some of the primary items that you may take on your (or your business’s) tax return include the following:
- Mortgage Interest – If you purchased your rental property(ies) using a mortgage, the part of your payment that represents interest is deductible. You may also deduct unsecured loan interest if you borrowed money to make improvements on the property.
- Insurance Premiums – Because insurance premiums are considered to be an “ordinary and necessary expense” by the IRS, your home insurance costs can also be tax deductible.
- Depreciation – Over time, wear and tear on a property can cause the value of it to depreciate. Depreciation is also a tax deductible expense.
- Property Repairs and Maintenance – The cost of hiring someone to cut the grass and/or maintain the property(ies) in other ways may also be deducted on your taxes.
- Utilities – While all landlords may handle the cost of utilities differently, if you pay for the electric, water, gas, and/or heat and air conditioning for your tenant(s), you can deduct these expenses, as well.
- Professional / Legal Fees – Owning rental property can often require the assistance of professionals, like attorneys and property managers. The fees that are paid to these individuals or companies are also deductible.
Partnering with a property management company that has a CPA on staff can provide you with an extra added bonus – as well as assist you with maximizing your Florida rental property tax deductions.
If you own residential rental property(ies) in the Central Florida area and you would like more information on the services that we offer, feel free to give us a call or send an email and we’ll be happy to answer any of the questions that you have.
Source:
9 Rental Property Tax Deductions: What You Should Know. SmartAsset. https://smartasset.com/taxes/rental-property-tax-deductions