People are trying to save more dollars rather than spending them. Are you looking for dollar saving ideas in rental investment? Then there are tax deductions available for rental property investors! Property taxes won’t be a burden anymore when you are completely involved with better tax strategies. You can be a passive investor or a pro in handling rental investments.
Tips to follow
Before the year ends, here are some quick tips which you can follow for property tax reduction. Any investor can benefit from these proactive tips to reduce property taxes higher than the previous year.
Repairs for property tax reduction
Most rental property owners believe that any repair or maintenance they do for their property is considered a deductible expense. Anything that is done in the name of repair, helps to maintain the property in good condition. You have to classify your repairs and maintenance to deduct them for the respective year. Some examples to classify your repairs are
- Painting
- Fixing a new light switch
- Replacing a damaged toilet
- Lawn care
- Losses due to natural disasters
Changing your roof or improvising your garden doesn’t come under maintenance. They are improvements and as you know improvements for a property are non-deductible. So, it’s better you classify your investments and repairs on your rental property to reduce property taxes.
Home office for tax reduction
You can set up a portion or a room on your property solely for business. This can be your office, meeting room, etc. Don’t worry about being audited either, there were new rules set in place after the 1990s. If you are maintaining a home office, then local transportation expenses can be covered using this advantage. You can qualify for a Property tax reduction as soon as you set up and use your home address
1031 tax exchange
This is one of the best offers available for property tax reduction. This 1031 tax exchange allows capital investments and depreciation from your rental property to invest the gains from rental property to same-like rental properties. In short, it’s called trading up the property. It was introduced by the Tax Cuts and Jobs Act.
These useful tips can make sure you are cutting down more on property taxes. O’Connor can help you in figuring out whether you qualify or don’t qualify for tax reliefs. Join in the property tax reduction service from O’Connor, they can make the job of reducing taxes much effortless for you!