April 15th may still seem like a long way off, but it will arrive before you know it. Filing income tax returns can be complex for someone who works one job and files the easy form, so if you own investment properties and find it daunting, you’re not alone.
The first challenge is knowing what is tax-deductible. You’ll need to get specific guidelines for your state, but in general, the following items are deductible:
- Interest paid
- Insurance
- Legal services
- Property management fees
- Losses due to theft or casualty
- Repairs
- Depreciation
- Some travel expenses, both local or long-distance
- Some home office or workshop expenses
The next issue is keeping track of all of these expenses. If you’re like many income property owners, you might have a shoebox somewhere that may or may not have receipts from the year. You may have started out strong and organized, but as time goes by, they get stuffed in a pocket, your car, or even thrown out.
While a property management company will not do your taxes for you, having them on your team will help you when tax season arrives. They keep track of your rent income as well as any expenses directly involving them, including maintenance and management fees. Plus, because those property management costs are deductible, it makes even more sense to use their service.
Every deduction you can claim makes your investment property more profitable. If you find it difficult to keep track of income and expenses, let us help you with your property in the Denver area, including the Centennial & Aurora areas, as well as, Parker & more. For more information on how Legacy Properties-PM can help you with keeping records as well as the day-to-day operation of your investment, please call 720.989.1996 or contact us.
