The first rule you’re supposed to recognize concerning deducting expenses is that you cannot deduct expenses you didn’t actually pay during the tax year. For instance, if you get somebody to do some repair works on the plumbing in your rental home in December 2019, though you didn’t actually pay for the job until January 2020, you might want to wait and deduct the cost of the repairs on the 2020 tax return.
Other non-allowable tax deductions include:
- Mortgage payments for your rental properties. Conceding that mortgage interest and property taxes are both deductibles, whatever payment made toward the loan principal is not.
- Entertainment expenses, even if entertaining guests is related to your business. On the other hand, business meals are still deductible, though the limits have changed under the new law.
- Business gifts valued over $25 and given to anyone person during the tax year.
- Club dues, including memberships to gyms, country clubs, or other clubs, even though you are utilizing these for business reasons.
- Capital improvements, namely reinstating new windows or a new roof on your rental house. These costs must be depreciated, not deducted.
- Other taxes, including state income taxes and local sales tax. These should be included in your personal income tax return.
- Fines and penalties, such as those levied by the IRS for underpayment of a prior year’s taxes and late payment fines.
- Political contributions, along with all that are contributions and amount spent on lobbying costs or campaign events.
- Home office space, until it is applied exclusively for business purposes. Possessing a family computer in the room could mean that your home office deduction is disallowed.
In the end, income tax deductions are tedious and may be laborious to learn. Even supposing a tax professional is the ideal source of guidance on whatever tax-related issues and questions, there are details you could execute to surely maximize both your time and your gains. Once you get Real Property Management Lehigh Valley to work with you, we will aid you in handling this questionable terrain of tax deductions in order that you never, at any time, have to think whether you are keeping track of the right items.
Our team of Forks Township property managers can provide you with the support you need to ensure that each potential tax deduction is taken as well as avoiding any disallowed item that may bring about problems with the IRS. With our guidance, you can be certain you’re establishing yourself for success and achievement both during tax season as well as throughout the year. Contact us online or call us at 484-544-3351 for more beneficial information.