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Tax Deductions for Landlords: What You Need to Know

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    Each year, there are millions of landlords, all around the country, who are paying much more for taxes on their rental properties than they must. You may wonder why. The main reason is that these landlords have not taken advantage of the many tax deductions that are available to them. The fact is rental real estate offers many more tax benefits than virtually any other investment you can make.

    In many cases, it is these benefits that can make a huge difference between earning a profit on your rental properties and losing money. If you are ready to learn more about the tax deductions you have the right to take as a landlord, keep reading.


    For many landlords, interest is one of the biggest deductibles they have access to. Some of the most common examples of different interest types a landlord can deduct include payments on loans used for acquiring or improving their rental property, mortgage interest payments, and credit card interest that is used to pay for services or goods that relate directly to the rental activity.

    The Tax Cuts and Jobs Act that was passed in 2018 limited the total interest deduction for landlords who are earning over $25 million from their rental properties. However, these landlords can avoid reaching this limit if they agree to depreciate their rental property for a period of 30 years instead of a period of 27.5 years.

    Rental Real Property Depreciation

    The actual costs of apartment buildings, houses, and other types of rental property aren’t fully deductible in the year when you pay for it. Instead, a landlord can receive the cost of the real estate by taking advantage of depreciation. This requires you to deduct a part of the cost of the property over a period of several years.


    The cost of repairs being made to rental property (if the repairs are necessary, ordinary, and reasonable in terms of amount) are completely deductible in the year when they have been incurred. Some good examples of repairs that are deductible include replacing broken windows, repainting, plastering, fixing gutters, fixing leaks, and flooring.

    Personal Property

    Costs of any type of personal property that is used for various rental activities can be used as a deduction in a single year based on the current laws related to this topic. This type of personal property includes furniture and appliances in rental units, along with gardening equipment.

    When it comes to landlords and taxes, there are more than a few factors to keep in mind. Don’t underestimate the benefits of using the monetary advantages that are available to you. If you have rental properties or any other type of real estate business, the best thing you can do is reach out to the professionals. Being informed and knowing what to do and look for is the best way to ensure you take the right steps to optimize your tax situation and avoid paying too much.

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    Hall CPA PLLC, real estate CPAs and advisors, helped me save $37,818 on taxes by recommending and assisting with a cost segregation study. With strategic multifamily rehab and the $2,500 de minimus safe harbor plus cost segregation, taxes on my real estate have been non-existent for a few years (and that includes offsetting large capital gains from the sale of property).

    Mike Dymski - Business Owner