Rental Property Tax Deductions | What Roseville Landlord Need to Know - Article Banner

As someone who owns Roseville rental property, you have a number of tax benefits available to you. While you’ll be required to report your rental income on your federal and state tax returns, you can limit some of your tax liability by claiming deductions. 

Most people dread taxes, but you can actually put your real estate investments to work and save some money by knowing which deductions to take. Always talk to your CPA or tax accountant. We’re providing our information and expertise from our perspective as professional Roseville property managers.

Deducting Mortgage and Other Types of Interest

If you have a mortgage on your rental property, you can deduct the amount you pay in interest on that loan. You can also write off any interest on home improvement loans or credit card interest if you can document that those cards were used to pay for property maintenance or property-related services.  

Deducting Fees for Roseville Property Management and Other Services

You can also deduct any professional fees you pay that are associated with your Roseville rental property. These might include property management fees, the cost of working with an insurance agent, and attorney costs. If you pay a commission to real estate agents, you can deduct that expense as well. 

Rental property owners can also deduct any advertising or marketing fees during the leasing period. If you have an accountant or a CPA tracking the income and expenses associated with your property and preparing your tax filings, you can deduct those costs as well. 

Deducting Property Depreciation 

One of the best ways to limit your tax liability as a rental property owner is by using depreciation as a tax deduction. Even if your property is increasing in value, the IRS allows you to deduct a specific amount in depreciation every year. 

According to current IRS guidelines, the property you own has a lifespan of 27.5 years. So, you’ll use that number to calculate your depreciation. You cannot include the value of the land your property is on; you’re simply using the value of your house. Divide the cost of your property at the time you acquired it as a rental by 27.5. That’s the amount of depreciation you can include in your tax return. 

Deducting Roseville Rental Property Maintenance Expenses 

Most of the costs associated with maintaining your rental property can be deducted from your taxes. This includes repair costs and any materials that you need to keep your property in operable condition, such as paint, drywall, smoke detector batteries, etc. 

However, you cannot deduct the costs of improving your home. If you renovate the kitchen or add a garage, those expenses are not tax-deductible. You may only deduct what it costs to maintain your Roseville rental property.

Personal Property and the Pass-Through Deduction 

house conceptPerhaps you are renting out a furnished property or you have personal property in that rental, such as appliances, a lawnmower, or a deep freezer. These items can be deducted in one year using the de minimis safe harbor deduction. It applies to property costing up to $2,000. You may instead be eligible for the 100 percent bonus depreciation which is currently in effect through 2022. 

There’s a lot to wrap your head around when we talk about deductions. If you’d like to learn more about how to maximize what you save, which ultimately leads to more income, please contact us at Action Properties. We’re your Roseville property management resource.