You would be surprised to know that rental real estate is one investment that provides tax benefits more than any other investment. However, there are still many property owners who are unaware of the various tax benefits available to them and eventually end up paying more taxes on the income they get through rent. Your profits are bound to rise if you make full use of the following tax deductions if you are the owner of a small residential rental property:
Theft losses or casualty
In case your rental property gets damaged because of flood or fire, you are likely to get a tax deduction for a part of the loss. These losses are known as casualty loss. The amount of tax deduction you get depends on the extent of the damage caused.
The cost of any repairs to your property are completely deductible in the year they are incurred. The repairs can be in any form like fixing floors, replacing broken windows among others.
Landlords can claim interest deductions in various forms like interest on your credit cards for services used in any rental activity, interest payments on loans taken for making improvements on the rental property among other things.
Traveling long distance
If you are forced to travel a long distance for any rental activity, you can get tax deductions on the various expenses incurred in the process.
You also get tax deductions on the various professional services that you hire like accountants and attorneys as long as you have hired them for your rental activity.
You can normally deduct the premiums that you generally pay for any insurance related to your rental property, including flood and theft.