Rental properties are a great way to make some extra income without having to devote every hour of your work week to sitting in an office. Though they are a great way to make relatively passive income, they are not without work so finding great tax breaks to help buffer any costs you may have for maintenance is a must. The expert team at AZ Residential Management has a few important tips to share on how you can get this biggest tax breaks possible.
There are tons of tax breaks that you can get that relate directly to your rental properties. These breaks will help to reduce the overall taxable income that you have to worry about from your properties so that you can make more money and offset any costs you may have.
The first tax break that you always want to keep in mind is the cost of employees and any independent contractors that you hire to help maintain the properties. You can deduct the salary of your employees, the cost of services like contractors, electricians, plumbers, architects, landscapers, and more. The reason you can deduct this is that it is an expense that you have against your overall profit that is used to keep the property serviceable and usable for your tenants.
Another expense that you can deduct are things like utilities, taxes, reasonable repairs, and even travel costs that you may incur while managing your properties. The only way you can deduct utilities is if you pay them for your tenants. You want to make sure that when you do start file your taxes that you take the time to really look at what you can deduct and take the time to deduct each and every expense that is deductible. You can also deduct the cost of a property management company if you use one like www.azresidentialmgmt.com.
Rental properties are a great way to get the extra income that you need but they can also be a great deal of work so you need to make sure you take the time to find out what expenses can be taken out of your overall profit to reduce the amount of money that you have to pay taxes on at the end of the year. A great solution is to hire a property management company like AZ Residential Management. The amount of time and hassle they save you is well worth the expense.
If you are planning on using anything as a deduction you want to make sure that you have accurate and complete records of any expense that you intend to deduct. You also want to take the time to have receipts and documentation to prove that the repair was done and that you have these records on hand and in a safe place so that if you do receive an audit, you will have the information you need to prove your expenses were justified.