Charlotte Rental Property Deductions Checklist: Maximize Your Returns

There are at least 1,387,271 renter households in North Carolina, according to the National Low Income Housing Coalition. As the NC real estate market expands, property owners must maximize returns to stay profitable.

Rental property deductions are among the perks landlords can use to maximize returns. A rental property deductions checklist can help you stay organized and ensure you capture all eligible expenses. It also makes the tax filing process smoother and more efficient.

Interested in maximizing your rental property returns? Here is a comprehensive checklist of rental property deductions that can help boost your returns.

Advertising and Marketing

The costs of listing your rental property qualify as deductions. Other deductions for costs in property advertising and marketing include:

Professional photography and video expenses
Commission fees paid to marketing agents
Signage costs
Website costs

Property Taxes

The amount paid for property tax varies with the location and size of the property. Fortunately, property taxes are eligible to be deducted from your income. For this reason, you should maintain a comprehensive record of the total property taxes paid.

When recording the total taxes paid, ensure the taxes are only for the percentage of the property used for rental purposes. If the property serves personal and rental uses, allocate the property taxes based on the square footage.

Always refer to state laws to determine real estate tax savings for mixed-use properties. Also, verify the maximum property tax amount that qualifies for deductions.

Maintenance and Repairs

Normally, home improvements are deductible through depreciation. However, the IRS allows you to deduct certain repair and maintenance costs incurred in improving your property. Examples of such property rental expenses, as indicated in the IRS publication 527, include:

Bedrooms and bathrooms
Garage and decks
Heating and air conditioning
Plumbing and insulation
Interior spaces such as the kitchen
Security systems

If you hire a professional to handle the maintenance, you can deduct the labor costs. However, any extensive work that adds to the property's value is not eligible for investment property deductions. This is because it is a capital improvement.

Insurance Premiums

Insurance costs are considered ordinary and necessary in safeguarding property against risks. For this reason, they qualify as landlord tax benefits.

Homeowners insurance, special peril, and liability insurance are some of the coverages eligible for tax deductions for landlords. If your employees have health or compensation insurance, deduct their premiums too.

If your rental property is in high-risk areas, consider coverage against floods or earthquakes. Such insurance covers can help prevent potential disruption to your rental income.

Discover the Best Rental Property Deductions Checklist for Maximizing Returns Today

Rental property deductions can help you reduce taxable income and maximize returns. However, you must deduct only the allowable expenses in the property rental business to get it right. The above rental property deductions checklist will help boost and maximize your returns.

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