It’s getting close to April 15, so it’s a good time to consider strategies to maximize your tax savings on your Minneapolis duplex.
First, you’ll need to report the income from the property, as well as expenses, on your tax returns.
A good way to simplify this process, is to keep a checking account specifically for your landlord activity.
So what tax deductions can you take as a landlord? Of course, you should consult a certified public accountant for expert advice, but general categories include:
Repairs and Routine Maintenance – if you repair the property, or buy supplies to do so, you may deduct the cost of both.
Depreciation – this is wear and tear to the part of the property you rent out, and allows you to defer taxes until you the time you sell.
Maintenance for Vacant Units – while you can’t take a deduction for the income you lose while a unit is vacant, you can take a deduction for expenses incurred to manage and maintain those units during vacancy.
Wages and Fees – You can deduct the wages you pay people you hire to maintain the building, as well as those you pay to professionals like lawyers or accountants.
Property Taxes And Local Services – As a landlord, you can deduct charges for utilties like water, sewer and trash, as well as local taxes or assesments for street or community improvements.
Insurance Premiums – You may deduct at least a portion of the cost or your insurance premiums.
Expenses for Rental Items – If you rent appliances for the unit, or carpet cleaning machines or lawn mowers to maintain the property, you may deduct those expenses.
Travel and Transportation – If you track the cost and mileage you log to manage your property or collect rent, you may deduct it.
Utitilies – If you install an extra phone line to conduct business related to your property in your office or home, you may deduct that cost. You can also decut the cost of any utilities you provide to the tenants.
Outdoor Painting or Siding – This is at least partially tax deductible.
Explore every category. After all, that’s one of the many reasons you bought a duplex!