Did you know that the vast majority of your rental property’s operating expenses are deductible for tax purposes? Rental properties are common investments, and there’s a lot to know when it comes to rental properties and your taxes. For example, did you know that repairs and improvements have to be handled differently when it comes to deductions? Were you aware that security deposits only count as income when you keep part of the deposit due to the tenant’s failure to live up to the terms of the lease? Did you realize that utilities, such as electricity, gas, and water, are generally considered fully deductible operating expenses?
It’s important to correctly calculate your rental property’s operating expenses, as any profit or loss from operating your rental property will affect that year’s taxable income. As a rule of thumb, operating expenses are fully deductible while improvements must be depreciated over a period of 27.5 to 39 years, depending on specific circumstances. Owning a rental property can be a great investment, but it can definitely complicate your taxes!
If you have any questions about how owning a rental property can impact your taxes, don’t go it alone. Taxation Solutions, Inc. is available to help Atlanta-area investors sort out the tax nuances of owning rental properties. Our team has a combined 40 years of experience in the tax help industry, and we have the know-how you can rely on. Contact us now to learn more.