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An Owner’s Guide to Rental Property Tax Deductions

Hanover County Rental Property Owner Doing Her TaxesOne of the major advantages of owning Hanover County rental properties is that, come tax time, you can take advantage of deductions that other taxpayers cannot. But to benefit from these deductions, you need to understand what they are and how to have your numbers ready before you start filling out your return. In this guide, we’ll explore the tax deductions that rental property owners can take and how they can help reduce your tax liability each year.

Common Expenses You Can Deduct

Having a detailed awareness of your property’s common expenses is important to optimizing your cash flows. It can also help you at tax time since you can deduct most of them on your return. Budget expenses that are also tax-deductible involve:

  • Repairs and maintenance. Anything you spend to maintain the condition of your property is usually a deductible expense. This incorporates fees paid to service providers, contractors, etc. Keep in mind that improvements – mostly significant ones – are not deductible as expenses. In that event, 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 invest in any utility service, like 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 involves whether you spend for a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

Besides common expenses, there are some other deductions that rental property owners may claim 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 usually one of the most advantageous deductions for rental property owners.
  • Depreciation. Another excellent deduction that rental property owners may enjoy is depreciation. All properties start to depreciate over time due to wear and tear. The upside is that you can deduct a certain amount for this depreciation over the life of the property. You can also deduct depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. Just like you can deduct expenses paid for repair work or landscaping, you can also deduct payments paid to attorneys or other professionals who provide services related to the management of your rental property. Many costs associated with eviction, Hanover County property management, and tax preparation are also deductible.
  • Travel. Owning rental properties often incorporates a couple of back-and-forth travel, whether you dwell in another state or only a few miles away. Those business-related miles may pile 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 accessible to you, you need to keep your property-related expenses organized and in one place. And there’s no need to wait until the end of each year; you can start keeping track of your expenses immediately and raise them as you go along. Doing it this way can make your job simpler each year when tax season comes around.


Another approach to make tax time easier is to employ Real Property Management Richmond Metro to take care of your operational expenses. Aside from 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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