Three Key Tax Deductions Landlords Should Know

If you’re a Brooklyn landlord with the upcoming tax filing deadline on your mind, we want to share a few key deductions to think about. A reminder that we’re not accountants, so use these as a guide but confirm all deductions through a tax professional.

Landlord Tax Deductions | Business Expenses

Provided you’ve kept good records throughout the past year and can provide proof of the following expenses, you can likely deduct many of these from your taxes. Ask yourself the following questions to determine eligibility.

Have you paid to advertise or any other marketing expenses?                     Whether you paid to post a listing, advertise on social media platforms, or in print publications, you may be able to deduct.

Have you tracked maintenance and repairs? 

This one’s a bit of a gimme, but remember that this includes everything from lawn/garden upkeep to HOA fees, repairs on mechanicals or even the batteries in smoke detectors. 

Pay insurance? We bet you do.                                                                                  Did you know that your policy is deductible? 

Did you pay a fee to anyone for management help?                                   Whether you paid a living, breathing human, a management company, or used paid software, this counts.

Did you have travel expenses?                                                                             This one only qualifies if 1) you go out of state and 2) it’s related to your property. 

Pay for any utilities?                                                                                                    Sewage, electricity, or gas, this one’s deductible even if your tenant reimbursed you

Landlord Tax Deductions | Reno and improvement deductions

Make note of these sections of the tax code and take questions to your accountant

Section 179                                                                                                                    Have you bought anything for your rental units that will be there for a significant period of time? This might include things like carpet, blinds, window screens, appliances, or lawnmowers.

Bonus Depreciation                                                                                                   This one is complicated but basically it distributes the deduction you receive for making improvements over the life of the property, rather than all at once. 

Landlord Tax Deductions | 20% pass-through   

 If you have tenants in a rental unit that you own who operate “pass-through” businesses (these could include  LLCs, S-corps, and partnerships), you may be able to deduct up to 20% of their business income. Again, it’s best to confirm particulars with your tax pro.

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