Rental Income Tax Preparation
The most common concerns I hear from owners of rental properly is how to properly organize their deductible expenses to be sure they are getting the best tax benefit and how the eventual sale of their property will impact their tax returns.
Although rental income can present these (and many) tax challenges over the years, most of my clients find it relatively easy to survive April 15th. I prefer to use a blend of expert tax preparation with a healthy dose of education to help them track expenses to be sure they don’t overpay their taxes.
What paperwork do I need?
In addition to your usual personal income tax documents, such as your W-2’s and 1099’s, please add up each of the following categories for the year:
- Rents collected
- Advertising expenses
- Management Fees
- Cleaning and maintenance
- Mortgage interest
- Property taxes
- Mortgage insurance
- Home owner’s insurance
- Lawyers and accounting fees
- Minor repairs (things you expect to do yearly)
- Utilities and user fees
- For major improvements or appliance purchases, do not combine them into a single total. Keep these expenses separate so we can properly depreciate them.
For the vehicle that you use for servicing the rental, your mileage will be deductible. We will detail the record keeping requirements, so you can get the best possible deduction.