Skip to main content

Utah Property Management Blog

Rental Property Deductions Checklist for Savvy Investors in Salt Lake City, UT

Rental Property Deductions Checklist for Savvy Investors in Salt Lake City, UT

Tax time comes every year, which means you must prepare for it. As a real estate investor, you'll pay taxes on your net income, which is the difference between your revenue and expenses.

No one wants to pay more than necessary, yet you must follow tax rules and laws. The best way to minimize your taxes is by maximizing your expenses.

To accomplish this goal, you'll need a rental property deductions checklist. This checklist helps you learn what expenses you can legally deduct to offset your revenue as much as possible.

Continue reading to learn more about the deductions you can take as a landlord or real estate investor in Salt Lake City.

Operating Expenses

Investing in real estate is a lucrative opportunity. You earn money by renting properties to tenants. They pay rent, but you must pay the expenses.

There are numerous expense categories you can write off for your rental properties, and the first is operating expenses. These include direct expenses for your properties, such as:

  • Repairs and maintenance costs
  • Utilities (e.g., electricity, gas, water)
  • Property management fees
  • Homeowners association fees

These are tangible expenses you paid for throughout the year. Tracking them in accounting software makes calculating the totals easy.

Depreciation and Amortization

Depreciation expense and amortization let you write off large assets over the course of years. An accountant may need to help you determine how to use depreciation as an expense for your business.

Interest and Taxes

The next category on your checklist should be interest and taxes. You can write off all the mortgage and loan interest you pay throughout the year, helping to lower your tax liability.

You can also write off certain taxes. For example, you pay property taxes on your investment properties, and you can write all of that off.

Insurance and Professional Services

Owning a rental property business requires having insurance, but fortunately, you can write that off. You can also write off any professional services you pay for relating to your business.

This includes legal fees, tax preparation fees, and property management fees. You can also write off money paid for subscriptions, real estate seminars, and other services you use.

Advertising and Marketing

If you purchase ads for your apartments or for rent signs to put up, you can write those off as marketing expenses. Advertising is necessary to decrease your vacancy rates, but you can write it all off on your taxes.

Other Potential Deductions

There are many other deductions you can write off. For example, if you work out of your home, you might qualify for a home office deduction expense.

Minimize Your Taxes With a Rental Property Deductions Checklist

A rental property deductions checklist helps you take advantage of every expense you incur as a landlord. Your expenses offset your revenue, helping you save money on your taxes.

Consulting a tax expert is helpful to maximize your expenses, and hiring a property management firm is also wise.

Tier One Real Estate LLC offers quality property management services in Salt Lake City and surrounding areas. We pride ourselves on offering the best property management services for the most competitive costs.

Get in touch with us to learn how we can help.