Write it off! The tax deductions available in the Omaha and Council Bluffs real estate market are a desirable aspect of being a landlord. Successful direct cash home buyers in Omaha and Council Bluffs take full advantage of these deductions to attain the best return on each investment dollar. Omaha and Council Bluffs real estate investors need to know these deductions and make property management decisions based on these tax benefits. Talk to a professional home buyer in Omaha and Council Bluffs to guide you about your real estate portfolio’s specific details, so you are not missing out on any of these and many other legal deductions!
There is a payoff for direct cash home buyers in Council Bluffs and Omaha who take the time to pursue every deduction and direct the extra funds towards purchasing more investments. They are growing even more wealth through the savings realized. We will cover five deductions Council Bluffs and Omaha real estate investors need to know about in 2021.
Depreciation
Depreciation, the amount of value the property becomes reduced due to wear and tear over time, is another deduction home buyers in Council Bluffs and Omaha need to know. Depreciation is deducted over 27.5 years using a specific formula for residential property values. Unlike maintenance or repairs, any voluntary improvements made to the property would fall under this formula. These deductions can reduce your tax liability by hundreds or possibly thousands. The best part, nothing is coming directly from your wallet to avail yourself of this benefit.
Segmented Depreciation
A lesser-known deduction Omaha real estate investors should know segmented depreciation requires more complex paperwork, but it may well be worth the effort for many. These are additional deductions for the wear and tear of any fixtures and appliances spanning up to 15 years. While depreciation is customarily divided by 1/27 for each tax year, this method is splitting the property into segments that depreciate at varying rates and could save you more money.
Mortgage Interest
While you may not deduct the principal paid on the mortgage or the expenses involved in attaining your mortgage, deductions Omaha and Council Bluffs real estate investors need to know the amount paid towards the interest is deductible through itemization. If part of your payment is going into escrow towards your property taxes or insurance, your mortgage company should provide an annual statement. The Tax Cuts and Jobs Act of 2017 introduced nearly double the standard deductions, with an upper limit on the mortgage amount you can claim this deduction for, dependent upon your filing status.
Maintenance and Repairs
Properly maintaining property includes making repairs swiftly to keep small issues from becoming substantial renovation projects. Regular upkeep such as painting, lawn care, plumbing, or electrical problems are expenses that Council Bluffs and Omaha real estate investors need to know they may deduct. Unlike depreciation which is a delayed deduction, a direct cash home buyer in Omaha and Council Bluffs can take these deductions for the tax year they made the repairs. You must categorize repairs and improvements properly on your return due to the vast difference in how you receive the benefit. Commonly used questions can help you determine if you are improving or rehabilitating the rental property or if the cost falls under repair guidelines. Direct cash home buyers in Council Bluffs and Omaha may also deduct interest for loans to improve the property. There are specific guidelines and limits to this deduction as with mortgage interest.
Other Expenses
Are you working out of a home office? Omaha and Council Bluffs real estate investors need to speak with a tax advisor about the office’s use and the home’s percentage this delegated space occupies. Direct cash home buyers in Omaha and Council Bluffs can write off any fees paid towards hiring a management company. Qualifying meal expenses incurred to manage your investment properties as well as travel expenses. These expenses can include driving to the property to collect rent or other business trips, near or far. Should you pay utilities without reimbursement from the tenants, this expense is also deductible, as are losses from natural disasters, for expenses not covered by insurance. You may even take a deduction for legal fees for evictions are also deductible.
The standard deduction from the Tax Cuts and Jobs Act of 2017 is frequently higher than individually itemized deductions, so many homeowners do not need to itemize. Because you do not need to have any expenditures to take the standard deduction, you may not have even had to pay any expenses out of pocket yet still receive the benefit!
Ready to begin investing and take advantage of these benefits today? Let our expert direct cash home buyers in Omaha and Council Bluffs at Harter Investments guide you to the best properties for you! Working with us makes investing easy because not only we buy houses in Omaha and Council Bluffs, we will be with you in the whole process. You gain an entire team of professional home buyers in Omaha and Council Bluffs with Harter Investments who are happy to take the time to listen to your dreams, helping you make them come true every step of the way. Harter Investments has excellent properties available to start your investment business running right now. You can increase your monthly income while increasing your future passive income. As an expert, we buy houses in Council Bluffs and Omaha which is an advantage and we will make sure to help you make good investments with your money. Start building your Omaha and Council Bluffs real estate portfolio today! Send us a message at 402-939-6556 or www.harterinvestments.com today!
