Owning a rental property has always offered great benefits to the owner. Almost all of their expenses can be deducted come tax season due to owning properties being treated similar to owning a business.
Tax season is approaching and many of you may be preparing close out your fiscal year with as many helpful deductions as possible. Here are a few tax deductions to keep in mind for your Austin, Texas rental home in 2018.
You Can Write Off Interest
Most property owners already know that they are able to write off the interest they pay on their mortgage for their investment property. This is typically the largest write-off of the year for any owner, however, there are several other types of interest one can write off for their property. Be sure to write off any interest paid on credit cards, lines for credit, and any other loan used to acquire, maintain, or improve your Austin rental.
Don’t Forget About Depreciation
In a city like Austin, you might not expect to be able to write of depreciation for your property. After all, hasn’t most of Austin real estate experienced huge appreciation the past several years? According to the IRS, a building’s “useful life” is 27.5 years. Every year at tax time this allows you to write off 1/27th of that property. However, in order to do so you must separate the value of the property from the value of the land. An appraisal can give you this information and you can also check your tax assessor’s database.
You’ve Been All Over the Place
Any and all travel associated with your Austin rental property can be written off at tax time. Travelling to Home Depot to get new appliances for the home? Be sure to track your mileage and expenses associated with that trip. It is even possible to write of the travel spent looking for properties here in Austin, Texas.
Your Employees & Contractors
Every time you pay someone to perform services related to your Austin rental home, you can deduct their wages/fees/expenses as a business expense for you. Be sure to keep your receipts and all records of such. Maybe the neighbor kid mows the lawn for you every Thursday so be sure to write off that $40!
Marketing Your Property
Your Austin rental property won’t do to well if there is no one renting it from you. Marketing runs any business and yours is no different. Maybe you paid for this brilliant website to feature your property, you’ve purchased signs to market your listing, or any other type of outreach for your rental home. Just keep in mind that any expense that occurs when doing so can be written off at tax time. Be sure to keep track of any and all ads you pay for.
Want to learn all of the new tax laws and how they impact your Austin rental property? You can read the full article here. If you struggle with tracking expenses and keeping everything organizes for tax season is may be time to hire an Austin property manager. As an Austin property management company, Stone Oak also assists landlords with protesting their property taxes every year. If you’re a landlord in Greater Austin and would like more information, please contact us.
