It’s easy to take a laid back approach to renting homes to tenants; however, renting properties is a legitimate business endeavor and should be treated as such. With meticulous bookkeeping, landlords can increase their earnings by claiming various deductions during tax season. Here are a few common expenses you can deduct as a landlord.

3 Tax Deductions for Landlords

1. Repairs

All reasonable, ordinary, and necessary repairs made on each rental unit are tax-deductible. For minor repairs, you may deduct the full amount for the tax year in which the expenditure was made. Track the total cost in your bookkeeping program for easy reference, and make sure to save all individual receipts in case you’re audited.

Major repairs are also deductible. However, they’re considered capital improvements, and you must spread the expense over multiple years using a depreciation formula.

2. Insurance Premiums

Landlords can deduct the premiums they pay for flood, fire, theft, and liability insurance every year. If you have employees working under you, you may also deduct the costs of their health insurance and workers’ comp coverage.

3. Utility Costs

If you cover sewer, trash removal, electric, gas, or another utility for the tenants, each monthly bill will be deductible. However, if the tenants reimburse you for these expenses, you’ll have to include them as part of your income. In other words, you’ll have to declare both the income and the expense, even if your bookkeeping program offsets them automatically.

For help claiming these and other applicable deductions during tax time, turn to Wilfred E. Bucher, CPA, in Honolulu, HI. Backed by over 40 years of experience, this certified public accountant is proud to help individuals and businesses better manage their finances so they can meet their short- and long-term goals. From personal financial planning to business bookkeeping, his firm offers a broad range of services for clients with varying needs. To schedule an appointment, contact him online or call (808) 528-4146.