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An Owner’s Guide to Rental Property Tax Deductions

Pflugerville Rental Property Owner Doing Her TaxesOne of the important advantages of owning Pflugerville rental properties is that, come tax time, you can capitalize on deductions that other taxpayers cannot. However, to benefit from these deductions, you should first recognize what they are and how to have your numbers ready before you start filling out your return. In this guide, we will talk about the tax deductions that rental property owners can take and how they might help reduce your tax liability each year.

Common Expenses You Can Deduct

Understanding your property’s common expenses is critical to optimizing your cash flows. It can also help you at tax time because you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. Anything you spend to maintain the condition of your property is generally a deductible expense. This includes fees paid to service providers, contractors, and so on. Bear in mind that improvements – primarily big ones – are not deductible as expenses. That being so, they need to be amortized as capital improvements instead.
  • Insurance. Insurance premiums for your landlord insurance policy, including any fire, flood, or personal liability insurance, are deductible expenses.
  • Utilities. You can deduct utility payments on your tax return if you pay for any utility service, whether water, garbage, electric, or gas. Utilities paid by your tenants are not deductible.
  • Advertising. Any money you spend to market your property and/or find a new tenant is a deductible amount. This includes if you pay for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

Apart from common expenses, there are some other deductions that rental property owners may utilize to help reduce their tax liability. These tax deductions include:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is commonly one of the most helpful deductions for rental property owners.
  • Depreciation. Another good deduction that rental property owners can take is depreciation. Most properties tend to depreciate over time due to wear and tear. The incentive is that you can deduct a certain amount for this depreciation over the life of the property. You can also take depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. In the same way that you can deduct expenses paid for repair work or landscaping, you may also deduct expenses paid to attorneys or other professionals who perform services related to the management of your rental property. Most costs associated with eviction, Pflugerville property management, and tax preparation are also deductible.
  • Travel. Owning rental properties sometimes demands a lot of back-and-forth travel, whether you stay in another state or only a few miles away. Those business-related miles can add up over a year and are deductible on your tax return. Just keep a log of your travel miles and any other travel-related expenses.

To take full advantage of all the deductions given to you, you need to keep your property-related expenses organized and in one place. And there’s no reason to wait until the later part of the year; you can start keeping track of your expenses immediately and add as you go forward. Doing it this way can make your life easier every year when tax season comes around.


Employing Real Property Management Advisors to monitor your operational expenses is one more method to make tax time simpler. Along with professional property management, we keep track of your property’s income and expenses and provide reports that can make tax time much easier. Contact us online to learn more!

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