Can I Claim It? Income Tax Deduction Information for Garfield Rental Property Owners

There are a number of important tax benefits for people who own rental properties that you should know about to lower your taxable income and make your business more profitable. Most of the time, tax deductions are claimed for the same tax year that the cost was made. It’s important to talk to a tax expert or lawyer to make sure you know the exact rules and requirements for each deduction and get the most out of them within the law.

Nondeductible expenses

Then again, non-allowable tax deductions are costs that cannot be deducted to lower income that is taxed. Personal costs that have nothing to do with the rental property, such as trips, clothes, or food, are examples.

1. Monthly mortgage payments. While mortgage interest and property taxes are both deductible, loan principal payments are not.
2. Even when the entertainment is connected to your business, entertainment costs are not deductible. Business dinners, on the other hand, are still deductible, though the restrictions have changed under the new rule.
3. Business gifts valued over $25 and given to any one person during the tax year are not deductible.
4. Club dues, such as subscriptions to gyms, country clubs, or other clubs, are not deductible even if you are entertaining for business purposes.
5. Capital improvement costs such as installing new windows or a new roof on your rental house, must be depreciated not deducted.
6. Other taxes, including state income taxes and local sales tax. These should be included in your personal income tax return.
7. Fines and penalties, such as those levied by the IRS for underpayment of a prior year’s taxes and late payment fines.
8. Political contributions, including anything spent on lobbying costs or campaign events.
9. Home office space unless it is used exclusively for business purposes. Even having a family computer in the room may mean that your home office deduction is disallowed.

In the end, income tax exemptions are hard to understand because they are complicated. Even though a tax professional is the best person to help you with tax problems or questions, there are things you can do to make the most of your time and money. When you hire Real Property Management Concierge, we’ll help you navigate the confusing world of tax benefits, so you’ll never have to wonder if you’re keeping track of the right things.

Our team of Garfield property managers can give you the help you need to make sure you get every possible tax deduction and stay away from things that the IRS won’t let you claim. With our help, you can be sure that you’re setting yourself up for success during tax time and all year long. For more information, you can email us or call us at 201-514-1603.