Buying investment property has one specific intention: to make a profit. Of course, maximizing profits means limiting the amount of taxes you pay on revenues. While most property owners deduct the interest and repairs, most overlook other key legal deductions. Here are 5 overlooked IRS tax deductions for investment property in Cincinnati & Dayton.
Be sure to maintain good records, keep all receipts and discuss all deductions with your tax advisor. Tax laws change frequently and should be reviewed annually.
5 Overlooked IRS Tax Deductions for Investment Property in Ohio
1. Insurance Premiums
Insurance on investment properties is often more expensive than on personal properties because of the higher business exposure for loss. Unlike personal insurance premiums that cannot be deducted, investment property insurance premiums are deductible. Deductible premiums include those paid for property, liability, and flood and earthquake insurance. If you have regular employees who manage or maintain the property, you must also carry workers compensation, which is deductible too.
2. Casualty and Theft Losses
Speaking of losses, you can deduct those as well. There is one caveat: you can only deduct an amount over what the insurance company doesn’t pay. For example, assume you have a 10% deductible on the investment property and a fire burns it to the ground. If the value of the claim is $250,000, your deductible is $25,000. You can claim the $25,000 as a tax deduction.
3. Independent Contractors
When keeping investment properties maintained, it is an easy trap to find the cheapest help to do odds and ends work. Often these handymen get paid cash. While this may save you a few bucks in ongoing maintenance and repairs, it doesn’t help with tax deductions. Any independent contractors that invoice you or provide a receipt become a deductible expense. Keep good records and pay with a business check to have further proof of this type of deduction.
4. Home Office
Most investment property owners don’t maintain a business office. If you did, that is certainly deductible. However, if you don’t, you are still able to deduct your home office. The IRS allows you to deduct space per requirements of dedicated use, meaning your kids don’t also do their homework at the desk. But if you have a dedicated space with a desk, computer, files, and other related items, you can deduct this.
5. Local Travel Expenses
How often are you going to and from the property, running to the home improvement store to get materials or stopping at the bank to make deposits? These are all business related activities and not part of your normal daily activities making them deductible as local travel expenses. Keep a mileage log and any receipts for gas, maintenance, and repairs on your vehicle. At the end of the year, determine if the standard mileage deduction or actual expense save you more money and take the appropriate deduction.
Legal and Professional Services
Don’t forget to deduct any legal and professional service costs you incur. It is common for property owners to deduct management company expenses, but don’t always consider the legal expenses for lease review, court costs for evictions and bookkeeping and accounting costs. All of these are deductible from property revenue. In fact, knowing these are deductible expense may sway you to actually employ the services of these professionals. Using professionals in these areas frees up your time to spend on the investment property and other things while you also can sleep better knowing these important things are handled properly.
Professionals protect you and protect your assets.
An old adage in real estate sales is “your home is worth what someone is willing to buy it for.” This suggests that there are many different factors, some arbitrary that go into the valuing of a home.
You’ve decided to sell your house on your own, and you realize there will be some costs involved. So, wisely, you’re now asking: “What should I budget for if I sell my house on my own in Cincinnati & Dayton?”
When we have something we need to sell, where’s the first place we usually turn? Craigslist, of course. But in this case, you have a house for sale. So you’re most likely asking this question: “What chances do I have when selling my home on Craigslist in Cincinnati & Dayton?”
It happens for all kinds of reasons: divorce, job layoff or relocation, or mortgage payments just becoming too much to handle. Whatever the reason, you are now in the position of needing to sell your house fast for cash in Cincinnati & Dayton.
The tax consequences when selling a house inherited in Cincinnati & Dayton can be hard to understand and untangle much of the time. 
Probate is simply the process of administering a decedent’s estate. Most of us have heard the stories about how long and headache filled the probate process usually is, and we dread it when we actually have to face it. 
If you’ve suddenly inherited a house, you may not be prepared for the questions and issues that can arise. And if you make the wrong decisions, you will likely encounter financial, emotional, and family problems before long. 
The answer to the often-asked question “Can a house be sold while it is in probate in Cincinnati & Dayton Ohio?” is “Yes.” 
When someone contacts you about your land, make arrangements to show it to them. You may or may not want to be there when they’re looking, but it might be helpful if you walk them through it and show them various features of the property and answer their questions. This will also help you hear directly from potential buyers so you can know what’s important to them, which could help you as you market your property.