Skip to Content

Top 6 Tax Deductions for Landlords.

Are you an investor or landlord looking for tax deductions? Many landlords don’t take full advantage of the potential deductions available to them. With the right strategies, you can maximize your savings each year by taking advantage of different deduction opportunities. In this blog post, we’ll talk through six key tax deductions that property landlords should consider when preparing their taxes and discuss how they could benefit from these opportunities. Whether it’s state and federal income taxes or self-employment liability taxes, understanding what deductions are available can help ensure a legal, profitable business model with minimal end-of-year surprises come April 15th!


Cityscape with Overlay of Stock Stats and Charts

Mortgage Interest Deduction

The Mortgage Interest Deduction has been a popular tax break for homeowners for decades. Homeownership is considered an investment, and like any investment, it can appreciate over time. However, the property can also depreciate as certain parts wear out over time, just like any other asset. With the Mortgage Interest Deduction, homeowners are given a tax break to help offset the cost of owning a home. It allows homeowners to deduct the interest payments they make on their mortgage from their taxable income. This deduction is particularly beneficial in the early years of a mortgage when interest payments are highest. The Mortgage Interest Deduction serves as an important tool for homeowners to help manage the cost of owning property while also building equity for their future.

Property Tax Deduction

Nobody likes paying taxes, but fortunately, personal income tax deductions can help ease the burden. One of the most significant deductions available to taxpayers is for property tax payments. The ability to write off a portion of property taxes paid can provide much-needed relief for homeowners and landlords alike. This deduction promotes tax fairness, as property taxes are often viewed as an undue burden on middle-class Americans. However, it’s important to note that not everyone takes advantage of property tax deductions due to the hidden nature of this tax break. Make sure to speak with a tax professional to ensure that you are not leaving any money on the table.

Home Office Deduction

Working from home has become increasingly popular in recent years, and as a result, many people are looking to take advantage of the home office deduction. This tax break allows individuals to deduct expenses related to their home office, including mortgage interest, insurance, utilities, repairs, and even depreciation. The savings can add up, making it a great option for those who work from home. It’s important to note that there are certain guidelines you must follow to qualify for this deduction, so be sure to consult with a tax professional before filing your taxes. With that said, the home office deduction can be a valuable tool for those looking to save money while working from the comfort of their own home.

A Mini Model House Sitting on a Financial Graph

Depreciation of Property Value

As the years go by, it’s no secret that property values can depreciate over time. This can be due to several factors, such as wear and tear, lack of maintenance, and changes in the local market. When a property depreciates, it means that its value has decreased over time, making it worth less than it once was. To combat this, property owners may invest in regular maintenance, repairs, and improvements to help retain its value. Additionally, depreciation write-offs may be available when owners file their taxes, which can help offset some of the losses incurred when a property depreciates. Despite these measures, however, property owners need to stay aware of their property’s value over time so they can make informed decisions about buying, selling, or investing in their real estate.

Plumber Working on a Water Heater in a Pasadena Rental

Expenses for Maintenance and Repair

When it comes to managing a property, expenses for maintenance and repair can quickly add up. Whether it’s fixing a leaky roof or replacing a broken heating system, periodic upkeep is necessary for any functioning building. But it’s not just the smaller repairs that need attention – capital expenses like renovations or large-scale replacements can also be costly. The good news is that many of these expenses can be tax deductible, making them more manageable for property owners. At the end of the day, investing in maintenance and repairs is crucial for the longevity and value of any property, and taking advantage of tax deductions can help keep those expenses in check.

Insurance Premiums Deduction

As a business owner, it’s important to be aware of all the tax deductions available to you. One deduction that often gets overlooked is the ability to write off insurance premiums as a business expense. This includes not only casualty insurance, but also umbrella insurance that provides additional liability coverage. By deducting these premiums, you can significantly reduce your tax liability and keep more money in your company’s budget. Just be sure to consult with a tax professional to ensure you’re taking the correct deductions and staying in compliance with tax laws.

In conclusion, landlords can take advantage of tax deductions to lower their tax burden during the tax season. We have covered six tax advantages that rental property owners can claim this year: depreciation, utilities, travel expenses, property management fees, insurance, and repairs. The key is to document and keep accurate records of all the expenses you incur in running your rental property. Consider hiring a tax professional to help you maximize your tax deductions while remaining fiscally responsible.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details