Did you know that Florida is one of only 9 states that don't have an income tax?
This allows you to save much more money than if you lived in North Carolina, for instance. That doesn't mean there aren't plenty of rental property taxes you'll have to cover. Even without an income tax, it's still important to deduct what you can and leave out anything else.
Are you wondering what belongs in your tax deduction column and what doesn't? Keep reading to learn all about the rental expenses that landlords can't deduct.
What You Can Deduct From Landlord Taxes
When it comes to a tax landlord guide, most people know that they can deduct some big-ticket items, including your mortgage's month-to-month interest, the costs of maintenance, and even various instances of depreciation.
What you may not know is that you can also deduct property taxes. These can add up to quite a bit after a while, so it certainly helps to deduct these every time.
Most rent collection software has various membership fees. This is yet another item you can deduct come tax season.
Are you stumped about what else you can deduct as a landlord? Insurance premiums, utilities, vacancy advertising, home office supplies, and even business traveling expenses can all be deducted.
Most of these chores can end up being handled by a property manager.
What You Can't Deduct From Landlord Taxes
Since there are so many rental expenses you can deduct, you might be wondering if there's anything you can't deduct after all. Before you try to deduct a single item, you should ask yourself, "Is this related to my business?"
If not, then you shouldn't put it in the bracket unless you want to get in trouble with the IRS. For instance, while you can deduct the mortgage interest on your rental properties, you can't do the same thing with interest on your personal home.
Even if you have a second home, you still can't deduct the mortgage interest if you aren't renting it out to tenants. Any time you're traveling for personal reasons rather than business ones, these are expenses you'll have to cover on your own.
You also can't get away with trying to deduct moving expenses. Since you'd be moving from one personal house to another, for example, there's nothing there that directly relates to doing business.
Ready to Avoid What Landlords Can't Deduct?
Now that you've learned about the rental expenses that landlords can't deduct, you can be more accurate when figuring out your taxes. The last thing you'd want is to pay fees or, worst of all, get audited.
If the idea of taxes on top of many other rental chores has your head spinning, don't worry. From Bradenton to Venice, Florida, we can offer you property management services that will make your life a whole lot easier. That way, you can spend less time working and more time enjoying your friends and family.
If you have properties in need of management, contact us.