As 2022 draws to a close, it will soon be time to think about filing your taxes. If you don’t pay quarterly estimated tax on your rental income, it is likely that you could owe Uncle Sam, based on the rental income you received throughout the year.
But there are also a number of items that you can deduct, in turn, reducing – or possibly even eliminating – any taxes that you owe on that incoming cash flow. The end of the year is a good time to get all of your information on this together.
Some of the most common tax deductions include the “ordinary and necessary expenses for managing, conserving, and maintaining your rental property.” For example, the IRS deems “necessary” expenses as those that are needed to operate your rental real estate business, such as maintenance, utilities, and property insurance, as well as interest, advertising, and even taxes.
There are also certain expenses that you could deduct that are related to keeping your property(ies) in good, livable condition. These can include materials and supplies, along with the cost of labor for repairs. (However, you may not deduct the cost of improvements, such as putting in a pool or adding a patio).
In order to maximize your income tax deductions on the rental property you own, it is necessary to keep track of your expenses. This can be accomplished by saving and filing receipts – either the physical version or through a computer-based program.
Handing over this task to a professional property manager can save you a considerable amount of time. With Central Florida Property Management, you will receive an easy-to-read monthly financial statement that is prepared by our in-house CPA.
So, if you own residential rental real estate in or around Orlando, Florida, we can help you take back some of your time in order to focus on other things. For more information on how our services work, contact us today!