If you’re a rental property owner in Florida, you’re probably wondering how to maximize your profits while minimizing your tax burden. The good news? There are plenty of tax strategies available to help you keep more of your income. Whether you’re just starting or managing a portfolio, these tips will help you save big. Let’s break them down.
At Insogna CPA, a leading Austin, Texas CPA firm, we specialize in helping property owners like you uncover every possible deduction.
1. Depreciation Is Your Best Friend
Did you know the IRS allows you to deduct a portion of your property’s cost every year through depreciation? Even though your property might be increasing in value, you can still claim depreciation to offset your taxable income.
- Here’s how it works: Residential properties are depreciated over 5 years, but this applies only to the building’s value, not the land.
- Why this matters: It’s a deduction you don’t have to spend extra money to claim.
Depreciation is often overlooked, but it can save you thousands. If you’re unsure how to calculate it, working with a trusted CPA in Round Rock, TX or an experienced Austin accounting firm can make all the difference.
2. Don’t Forget About Mortgage Interest
If you’re financing your rental property, the interest on your mortgage is deductible. This is one of the most significant tax savings for property owners.
- What to know: Mortgage interest can be a huge expense, especially in the early years of the loan.
- Why it’s valuable: Deducting this expense lowers your taxable income and keeps more money in your pocket.
Partnering with a knowledgeable Austin, TX CPA firm, like Insogna CPA, ensures this deduction is captured every year.
3. Maximize Those Repair Deductions
Repairs are a necessary part of owning rental properties, and the good news is they’re fully deductible in the year you incur them.
- Examples: Fixing a broken window, replacing an appliance, or repairing a roof.
- The catch: Repairs must be ordinary and necessary to qualify as deductions. Improvements, on the other hand, must be depreciated over time.
An expert CPA can help you differentiate between repairs and improvements, so you don’t miss out on any savings. This is why so many property owners rely on Austin’s accounting services.
4. Use 1031 Exchanges to Grow Without Paying Taxes
Thinking of selling a property to invest in another? A 1031 exchange lets you defer paying capital gains taxes when you reinvest in a similar property.
- What to know: The IRS requires strict compliance with timelines and reinvestment in “like-kind” properties.
- Why it matters: This strategy helps you grow your portfolio without losing profits to taxes.
Many investors use 1031 exchanges to build wealth while working with leading accounting firms in Austin, Texas to navigate the process
5. Deduct Travel Expenses for Property Management
Do you travel to check on your properties, meet with tenants, or oversee maintenance? Those costs are tax-deductible.
- Examples: Mileage, airfare, hotel stays, and meals for overnight business trips.
- Tip: Keep detailed records of all travel expenses, including receipts and mileage logs.
At Insogna CPA, part of our Austin accounting services includes helping you organize and track these expenses so you never miss a deduction.
6. Know the Rules on Passive Loss Limitations
Rental property income is usually considered passive, which means there are limits on how much you can deduct in losses.
- What to know: If your expenses exceed your rental income, you might not be able to deduct all your losses unless you qualify as a real estate professional.
- Why this matters: Understanding these rules can save you time and help you plan more effectively.
Our team at Insogna CPA, one of the best CPA firms in Austin, can guide you through the passive loss limitations so you’re maximizing your returns within the rules.
7. Work with a CPA to Uncover Hidden Opportunities
The tax code is complicated, and that’s why having a CPA in your corner is invaluable. At Insogna CPA, we specialize in helping rental property owners uncover tax savings they might otherwise miss.
- Why it matters: A professional CPA stays up to date on tax law changes, ensures compliance, and helps you claim every deduction.
- Bonus: Partnering with a proactive CPA firm ensures you have a long-term strategy for success.
Many of our clients tell us they had no idea how much they could save until they started working with us. As a top-rated Austin CPA firm, we’re here to make sure you get every advantage possible.
Ready to Save More on Your Rentals?
Tax season doesn’t have to be stressful. Whether you’re in Florida or Texas, Insogna CPA, one of the top CPA firms in Austin, TX, can help you maximize your rental property deductions and plan for long-term success.
Contact us today to discover why we’re trusted by property owners as the best CPA in Austin for rental property tax strategies. Let’s save you money and grow your wealth—together.