1. Take the home office deduction.
Unlike W-2 employees who burn the midnight oil from home, business owners may deduct the expenses of having a home office from their taxes. Yet too many people — including more than half of all landlords — 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.Your deductible travel expenses will increase significantly once you’ve established that your primary office is at home. Whether you’re driving locally to meet with tenants, check on properties, oversee maintenance, or fly across the country to manage a far-flung portfolio or search for a new property, business travel is a significant deduction.
3. Include all of your vehicle expenses.Suppose you use your vehicle for rental activities (driving to your properties or picking up supplies). In that case, you can claim the standard mileage rate or the expenses (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 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.
Your goal as an investor isn’t just to boost revenue. It’s also to keep as much of that money as possible.
These deductions can significantly reduce your taxable income and increase your bottom line — helping you make way more money and pay way less tax.
Want to learn more about how you can make way more money and pay way less in tax? Book a call with the team at TFW Advisors® today!