No landlord would pay more than necessary for utilities or other operating costs for a rental property. Yet millions of owners pay more taxes on their rental revenue than they have to. Why?

Rental real-estate provides more tax benefits than almost any other investment.

Each year, millions of owners pay more taxes on their rental earnings than they need to. Why? Because they fail to take advantage of all the tax deductions available for owners of rental property. Investment real estate provides more tax benefits than pretty much any other investment.

Often , these benefits make the greatest difference between losing money and earning a reasonable profit on a rental property. Here are the top ten tax rebates for owners of home rental property:

1. Interest

Interest is often a landlord’s single biggest deductible cost. Common instances of interest that owners can deduct include mortgage loan payments on loans used to procure or improve rental property and interest on cards for products or services employed in a rental activity.

2. Depreciation

The actual cost of a home, residence building, or other rental property isn't absolutely deductible in the year in which you pay for it. Instead , landlords get back the price of real estate through depreciation. This implies taking some of the cost of the property over one or two years.

3. Repairs

The price of repairs to investment property (provided the repairs are standard, obligatory, and reasonable in amount) are totally deductible in the year in which they are incurred. Great examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

4. Local Travel

Owners are entitled to a tax reduction when they drive anywhere for their rental activity. For instance, when you drive to your rental building to handle a renter complaint or go to the hardware store to purchase a part for a repair you can subtract your travel costs.

If you drive an auto, SUV, wagon, pickup, or panel van for your rental activity (as most landlords do), you have 2 options for taking your vehicle costs. You can:

– deduct your actual expenses (gasoline, upkeep, repairs), or
– use the standard mileage rate (56.5 cents per mile for 2013). To be accepted for the standard mileage rate, you should use the standard mileage technique the 1st year you use a automobile for your business activity. Moreover, you can?t use the standard mileage rate if you have claimed accelerated depreciation deductions in previous years, or have taken a Section 179 deduction for the vehicle.

5. Long-haul Travel

If you travel overnite for your rental activity, you can subtract your airline fare, hotel bills, meals, and other costs. If you arrange your trip fastidiously, you can also mix landlord business with pleasure and still take a deduction.

However , IRS auditors closely size up rebates for overnight travel? And many taxpayers get caught claiming these reductions without correct records to back them up. To remain within the law (and avoid unwanted attention from the IRS), you need to properly document your long haul travel costs.

6. Home Based Office

Provided they meet certain minimum wants, owners may take their home-based office costs from their taxable income. This deduction applies not only to space dedicated to office work, and additionally to a workshop or any other home workspace you use for your rental business. This really is true whether you own your house or studio or are a renter.

7. Workers and Independent Contractors

When you hire anyone to perform services for your rental activity, you can subtract their wages as a rental business cost. This is so whether the employee is a worker (for instance, a resident manager) or an independent contractor (for example, a mend person).

8. Casualty and Theft Losses

If your rental property is damaged or wiped out from a sudden event like a fire or flood, you may be able to acquire a tax reduction for any part of your loss. These kinds of losses are called casualty losses. You often won’t be in a position to take the entire cost of property damaged or destroyed by a casualty. How much you will subtract relies upon how much of your property was demolished and whether the loss was protected by insurance.

9. Insurance

You can subtract the premiums you pay for nearly any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as owner culpability insurance. And if you have workers, you can deduct the price of their health and workers? Compensation insurance.

10. Legal and Pro Services

Finally,. You can deduct costs that you pay to attorneys, accountants, real estate management firms, real-estate investment counsels, and other execs. You can deduct these fees as operating costs as long as the costs are paid for work related to your rental activity.

Did You Know?

Were you aware that:

– Owners can greatly increase the depreciation deductions they receive the first few years they own rental property by utilizing split depreciation.
– Considered planning can enable you to subtract, in a single year, the price of improvements to rental property that you may instead have to deduct over 27.5 years.
– You can lease out a holiday home tax free, in a few cases.
– Most little landlords can deduct up to $25,000 in rental property losses every year.
– A special tax rule permits some landlords to deduct 100% of their rental property losses every year, irrespective of how much.
– Folks who rent property to their family or friends can lose just about all of their tax rebates.

If you did not know any of these facts, you might be paying much more tax than you want to. As usual, be sure to talk with your tax advisor or tax pro.

[Author’s note: View our new Better Business Bureau review.]

Marco Santarelli
is an investor, author and founder of Norada Real Estate Investments — a
nationwide real estate investment firm providing turnkey investment property in
growth markets around the United States. For more articles like Top Ten Tax Deductions for Landlords,
please visit our Real Estate
Investing Blog where it was originally published.