Spectrum Enterprises LLC
Tax deductions and You
So, you have a piece of property that you’re renting out. Let’s say that this piece of property earns you a pretty penny before taxes. After taxes, well, the money left over isn’t enough to get you a meal from the local greasy spoon. That might be an exaggeration, but not by much. Any property owner knows that taxes will eat into any earnings from your property. So, how do you keep more of that hard earned dollar in your wallet? I’ve listed a few things below to get you started:
1. Go green on your property. The US government will give you tax credits (up to US$500) if you install energy efficient appliances such as Biomass stoves or an Energy Star certified Air Conditioning unit. Contact your local HVAC contractor for eligible models.
2. Any interest accrued due to repairs, maintenance of additions to your property can be deducted as an expense on your income tax. Any interest accrued from using a credit card or loan to purchase or repair your property can be tax deductible.
3. Report rental income and expenses accrued on the rental property on Schedule E, Form 1040. Be sure to report ALL expenses related to the property such as repairs made, property taxes, depreciation and mortgage interest (if any)
4. Repairs and upgrades are tax deductible expenses they same year they are executed.
5. Any expenses accrued due to traveling as a result of a tenant's complaint or request is also tax deductible. Examples being gas and wear and tear on the vehicle used.
One last piece of advice, forking out a little money for a good accountant can save you even more money and take most of the stress out of keeping your books straight. Remember, the money your property earns is your money, and you have the right to fight for every penny.
Augustus McMillan is the managing director of McMillan Consulting with offices in Baltimore, Atlanta and DC. He has been preparing taxes for others since 1997, with real estate being one of his specialties. He can be reached at 410-775-6226 or ace at macadvises.com
Spectrum Enterprises, LLC was created by investors for investors. We
recognize the importance of maximizing cash flow and profitability in
your real estate endeavors in Washington DC. Spectrum specializes in a
myriad of services, which consists of investments, consulting, sales and
property management. www.spectrum-ent.net
1. Go green on your property. The US government will give you tax credits (up to US$500) if you install energy efficient appliances such as Biomass stoves or an Energy Star certified Air Conditioning unit. Contact your local HVAC contractor for eligible models.
2. Any interest accrued due to repairs, maintenance of additions to your property can be deducted as an expense on your income tax. Any interest accrued from using a credit card or loan to purchase or repair your property can be tax deductible.
3. Report rental income and expenses accrued on the rental property on Schedule E, Form 1040. Be sure to report ALL expenses related to the property such as repairs made, property taxes, depreciation and mortgage interest (if any)
4. Repairs and upgrades are tax deductible expenses they same year they are executed.
5. Any expenses accrued due to traveling as a result of a tenant's complaint or request is also tax deductible. Examples being gas and wear and tear on the vehicle used.
One last piece of advice, forking out a little money for a good accountant can save you even more money and take most of the stress out of keeping your books straight. Remember, the money your property earns is your money, and you have the right to fight for every penny.
Augustus McMillan is the managing director of McMillan Consulting with offices in Baltimore, Atlanta and DC. He has been preparing taxes for others since 1997, with real estate being one of his specialties. He can be reached at 410-775-6226 or ace at macadvises.com
Spectrum Enterprises, LLC was created by investors for investors. We
recognize the importance of maximizing cash flow and profitability in
your real estate endeavors in Washington DC. Spectrum specializes in a
myriad of services, which consists of investments, consulting, sales and
property management. www.spectrum-ent.net
