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Top Tax Deductions for Rental Owners to Remember This Tax Season

As an owner in the Boise Metro Area, tax season can feel overwhelming, but it’s also an opportunity to maximize your rental property’s profitability. Knowing which deductions to claim can significantly reduce your taxable income and save you money.

Here are the top tax deductions every Boise owner should keep in mind this year:

1. Mortgage Interest

For many owners, mortgage interest is one of the largest deductible expenses. Whether you’re paying off a loan on your rental property or a line of credit used for property improvements, these payments can typically be deducted.

2. Property Taxes

Local property taxes are a deductible expense for owners. In Boise, staying on top of property tax assessments ensures you’re claiming the correct amount.

3. Repairs and Maintenance

Expenses for necessary repairs and maintenance are fully deductible in the year they’re incurred. This includes fixing a leaky roof, replacing a broken water heater, or addressing resident-requested repairs.

4. Depreciation

Rental properties are considered depreciable assets. The cost of the property (excluding land) can be deducted over its useful life, providing long-term tax benefits. If you have not talked to Chelsea about cost segregation, it may be worthwhile to send her a message… this has been a hot topic and will likely return as such in the next 4 years.

5. Insurance Premiums

Premiums for rental property insurance, including liability and fire coverage, are deductible. If you have umbrella insurance policies, those may qualify as well.

6. Professional Services

Fees paid to property management companies, accountants, attorneys, and other professionals who assist with your rental property are deductible.

7. Utilities

If you cover utilities such as water, electricity, or trash collection for your rental property, these costs can be deducted. Make sure to keep detailed records of what you pay.

8. Travel Expenses

If you travel to and from your rental property for inspections, repairs, or resident meetings, you can deduct mileage or actual travel expenses. This applies to both local and long-distance travel, as long as it’s related to property management.

9. Advertising Costs

Expenses for advertising your rental property, such as online listings, print ads, or professional photography, are fully deductible.

10. Home Office Expenses

If you manage your rental property from a dedicated space in your home, you may qualify for the home office deduction. This includes a portion of utilities, internet, and even rent or mortgage interest if you’re a resident yourself.

Tips for Maximizing Your Deductions

  • Keep Detailed Records: Maintain organized receipts and records of all expenses related to your rental property.
  • Consult a Professional: A tax professional familiar with rental owner tax deductions can ensure you’re maximizing your savings.
  • Plan for Depreciation: Work with an accountant to calculate and plan for long-term depreciation benefits.

    Final Thoughts

    Navigating tax deductions as rental owners doesn’t have to be daunting. By understanding the top deductions available and keeping thorough records, you can make the most of tax season and protect your investment. Ready to make property management even easier? Contact us at Urban City Property Management to learn how we support Boise rental owners year-round.