5 Tax Deductions Landlords Need To Know About

December 11, 2020

Since rent is a form of income, landlords aren’t exempt from taxes. If you are new to renting and aren’t sure which tax deductions apply, allow your Encino tax consultants to enlighten you. There are many deductions applicable to landlords that reduce income taxes. 

Mortgage Interest

Landlords can deduct the interest they pay on all their rental properties’ mortgages. The interest on commercial properties also applies assuming they are also rented out. For example, if you own a garage and numerous associates rent spaces there, you can deduct mortgage interest assuming you make enough taxable income for the year. 

Repairs

Any repairs made on rental properties throughout the tax year are deductible since they are necessary to maintain the property. Common repair deductions include new flooring, gas and plumbing repairs, electrical work, broken window replacements, plastering work, gutter fixes, and leak repairs. 

Personal Property

While most personal property is not tax exempt, it is for landlords if they use the property for rental maintenance and decor. The lawn and gardening equipment you use to maintain the properties’ curb appeal counts, as does any appliances or furniture you use to furnish the units. Any other equipment, appliances, or furniture you use for rental purposes is also deductible, such as portable generators. 

Travel Expenses

Plenty of landlords do not live near their rental properties. If you must travel throughout the tax year to maintain or repair your rentals, you can deduct all related travel expenses. Such costs include gas, tolls, vehicle maintenance, and hotel/motel expenses if you need to stay overnight. The IRS provides taxpayers with a standard mileage rate for calculating deductions. 

Property Depreciation

While apartment, townhouse, or house rental costs are not entirely deductible in the years they were purchased, it is possible to deduct depreciation rates. By deducting the depreciation of the actual buildings as well as items such as appliances and furniture, you get to make the money you originally paid back. 
Discuss these and other landlord tax deductions with the Los Angeles accounting experts at Wallace and Associates. The company remains one of the premier accountant services in L.A.