RENT Magazine Q4'23

1. TAKE THE HOME OFFICE DEDUCTION Unlike W-2 employees who burn the midnight oil from home, business owners may deduct the expenses associated with having a home office from their taxes. Yet far too many people fail to take this deduction. Work with a CPA who will help you use and document your home office expenses correctly so you don't miss out. 2. DEDUCT YOUR TRAVEL EXPENSES Once you’ve established that your primary office is at home, your deductible travel expenses will increase significantly. Whether you're driving locally to meet with tenants, check on properties, oversee maintenance, or flying across the country to manage a far-flung portfolio and/or search for a new property, business travel is a significant deduction. 3. INCLUDE ALL OF YOUR VEHICLE EXPENSES This category is a little complex, so it deserves a place on the list separate from travel expenses. If you use your vehicle for rental activities, such as driving to your properties or picking up supplies, you can claim either the standard mileage rate or actual expenses like gas, maintenance and depreciation. Work with your CPA to determine which is better for you. 4. DON’T SKIMP ON PROPERTY MARKETING Advertising is crucial to attracting tenants. Any money you spend on marketing your rental properties, such as online listings, brochures, etc., is fully deductible. 5. DEDUCT ANY MANAGEMENT FEES If you hire a property manager to handle day-to-day operations, their fees can be deducted. This also applies to fees paid to attorneys, accountants and other professionals related to your rental business. 6. USE COST SEGREGATION AND BONUS DEPRECIATION I speak with a lot of real estate investors every year, and I continue to be shocked by how many people avoid a cost segregation analysis because someone told them it would get them flagged for an IRS audit. This is terrible advice (and often a sign the investor needs a new CPA). Cost segregation, coupled with bonus depreciation, is the correct way to depreciate your investment — saving you a ton on taxes.

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