Tax season can be a hectic time of year for almost all property owners. To make it less stressful, and to get the most benefits out of your deductions and write-offs, make sure you keep your tax records organized. Being unorganized and unprepared can have you losing out with your taxes.
This is where Gassen can help you with your accounting and property management needs. We have an extensive organized system that will keep accountability and tax preparation flowing smoothly.
Here are some things to keep track of and use for tax write-offs this year.
1. Car Deductions & Mileage
There are two ways you can take advantage of this write-off. You can keep track of the gas, oil changes, repairs, etc. that come using your business vehicle.
The other way you can take advantage of this write-off is by keeping track of your mileage you use for your business. With this method, you will have to take the standard mileage deduction for each tax year. This year it’s 62.5 cents per mile.
2. Office Expenses
Whether you work from home or in an office outside your home, you will have deductions you can take for running this office. If your office is outside the home, you can deduct all of the rent and utilities, as well as other expenses you may have.
However, if your office is in your home, then you can deduct a percentage of your related expenses. This will be determined by the amount of space you use exclusively for running your property management business.
Property owners have a wide range of insurance coverage they carry. Coverage expenses can include business liability insurance or employer liability insurance.
In addition, if you have a home office, you can deduct a portion of your homeowners insurance. If you are self-employed, your health care premiums are 100 percent deductible.
4. Advertising & Marketing
In today’s market, there are many ways to advertise and market your property management business, including ads in the paper or online marketing.
All of these things are deductible, including the stamps to mail flyers, as well as the fees to join an online property managing networking group. Even signs that you purchased for your business are deductible.
Make sure you keep track of all receipts so you don’t miss out on your deductions.
5. Building Repairs, Cleaning, & Maintenance
Every time you have to make repairs or clean the buildings you manage or pay another company to do those things, keep the receipts. Those maintenance tasks are tax deductible.
There are some stipulations to be wary of, however, which is why it’s a good idea to talk with an HOA accounting specialist before declaring every project a repair. The law has specific rules regarding repairs versus improvements, and those have to be taken into account when seeking deductions.
Essentially, general maintenance, cleaning, and basic fixes are all full write-offs. But improvements are seen as any work done that upgrades or betters the quality of the building.
Replacing equipment, like a washer or dryer, or replacing a part of the building itself, like the roof, is seen as an improvement, and instead of receiving a write-off, all you can do is depreciate the cost over several years.
Property Management in Eden Prairie, Minnesota
For more information on tax deductions as a property manager or if you need help with property management or business accounting, give Gassen a call.
We provide real estate listings, property management, and online accounting services, as well reserve studies. Give us a call today so we can meet your business needs. You can reach us at 952-922-5575, or you can message us on our contact page.