RENT Magazine Q1 '22

TAX LAWS YOU CAN GET EXCITED ABOUT

While being a landlord is often a difficult job, the tax benefits that come with owning investment properties help sweeten the deal. Whether you are already a landlord or thinking of investing in property, learn about the investment property tax benefits available to landlords. Mortgage Interest Deduction Home Improvement and Travel Deductions Whenever you visit your rental property, you can deduct

Your mortgage loan accrues interest, just as other types of loans do. When you run a property for investment (rather than as your primary residence), you can deduct the mortgage interest on your taxes. Landlords can also deduct interest from home equity loans, which are loans taken out with the intention of improving a property. Homes must be less than $1 million to qualify for the mortgage interest deduction. Real Estate Tax Deduction Landlords also get to deduct real estate taxes paid to the county or city. These taxes may be part of your mortgage payment if you have an escrow account, or you may make quarterly payments to your county or city. Deducting the real estate taxes allows you to offset rental income.

your travel expenses. From gas mileage and rental car costs to airfare or hotel rooms, it’s all deductible — including your meals during your visit. You’re also able to deduct home improvement expenses, including repairs made for your rentals. Whether you repaint in between tenants or hire an electrician to install more outlets, you get to deduct what you paid. If you pay a contractor over $600 over a year, the IRS requires that you provide a 1099-MISC form. No matter how much you pay the contractor, you get to deduct it on your taxes. Regarding any money you pay for homeowners’ association dues, condo fees are deductible on your taxes.

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