Even though the 2021 holiday season is still barely behind us, spring will be here soon – and that means that tax time is just around the corner. As the owner of residential rental property, you could be eligible for some nice income tax deductions.
With the various changes that have taken place since the COVID-19 pandemic began (almost two years ago), you may have some undiscovered write offs that could put (or keep) more money in your pocket…and out of Uncle Sam’s!
Some of the primary tax benefits that can come with owning residential rental property include:
- Deduction of your (the owner’s) expenses, such as mortgage interest, property insurance premiums, cost of repairs and maintenance, advertising expenses (for vacancies), equipment and supplies that are used for running your rental business (such as a computer and business cards), accounting and legal expenses, and property management fees
- Depreciation deduction(s)
- Lower FICA taxes on rental income (because this form of cash flow is not considered as “earned income” by the IRS)
The IRS provides additional information on rental real estate income and deductions via its website. You can learn more by going to: https://www.irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping.
But, because everyone’s situation is different, it is recommended that you consult with a tax professional for more personalized advice. It can also be extremely beneficial to work with a Florida residential real estate property manager that also has a CPA on staff who is directly responsible for the accounting and financial reporting processes of the properties that are managed by the company.
So, if you own residential investment property in Orlando and/or the Central Florida area, and you would like more information, feel free to call us directly at (407) 429-4834 or send us an email through our secure online contact for by going to https://cflpropmanagement.com/contact-us/. We look forward to hearing from you.