Tax season is here and as a real estate investor you owe taxes on all of your property and revenue for the previous year. Whether you’ve just started out in real estate investment or are an old pro, your goal should be to maximize your deductions so that you can pay the least amount possible. But what can you deduct? Here are a couple of tax deduction tips from your local Seattle property managers that you might not have considered. First, before you get started, you should make sure that you have all of the proper paperwork including your HUD forms. If you don’t know what these are, you should definitely consider hiring a professional to help because you definitely need it! At the least, it is a great idea to hire an accountant just for tax season, or to have one around all year to keep tabs on your taxable income and deductible expense.
Mortgage Interest & Taxes
If you purchased your investment property with a mortgage you can actually deduct the mortgage interest, the taxes on the mortgage, and any mortgage insurance you might be paying. All of these factors can actually add up a great deal over the course of one year so make sure you tally each one and deduct them from your taxable income.
Settlement costs include origination points, junk fees, title review, settlement attorney fees, appraisals, recording, home owners insurance, and more. You will need your paperwork and proof of each of these fees so make sure you go prepared, and organized.
Repairs & Maintenance
Whether you’ve upgraded the property, remodeled, or simply fixed things around the property, it’s all tax deductible. If you’re at the end of the year and you want to give less to Uncle Sam, spend money on a remodel and let it go back into your business instead. Fixing things means you’re more likely to get clients and renters, and that you pay less at tax time. It is a win-win situation.
If you want to claim depreciation you should definitely have an accountant to help because claiming can be complicated, and you might be investigated if you claim too much. Currently real estate has been steadily losing value for about the past 17 years; that means you can claim deprecation of value from the time of purchase, which is a loss to you!
Did you know that you can actually deduct the bill from your accountant? No matter what they charge, a bill from your accountant is 100% tax deductible, which means that you can actually save money by hiring someone to help you get all of the fine lines straight on your tax return. Because they can also save you time and a lot of hassle, it’s definitely worth it to hire a pro.
Your Seattle Property Managers
Finally, you can deduct any and all expenses from your Seattle property managers. If you hire SJA Property Management to manage your property, you can actually deduct the expenses at the end of the year. A property management company can make your life easier and maximize your income by advertising and renting out your units, and finding the resources you need as cheaply as possible. We save you time, money, and stress, and the fees from SJA Property Management are completely tax deductible.