So, you’ve built a real estate empire (or at least a solid rental portfolio) but now the tax man is knocking on doors in multiple states. Sound familiar? If managing multi-state tax filings feels more confusing than reading legal jargon in a lease agreement, you’re not alone.
Each state has its own set of tax rules, deadlines, and quirks. Mess it up, and you could be paying more than you should or, worse, facing penalties. And let’s be real: you didn’t invest in real estate to fund state governments.
That’s where Insogna CPA, a top-rated Austin, Texas CPA firm, comes in. We help real estate investors cut through the tax noise and keep more of what they earn. Let’s talk about how you can stop overpaying and start making multi-state taxes work in your favor.
The Problem: Multi-State Taxes Are a Mess
Owning properties in different states? That’s great for cash flow but not so great for your tax return. Here’s what makes multi-state taxes such a headache:
- Every state has different filing rules. Some states tax rental income, some don’t. Some states require a return even if you made $1 in income. (Yes, really.)
- Double taxation is a real threat. Without the right strategy, you could get taxed in two states on the same income. Spoiler: That’s not how you build wealth.
- Deadlines are all over the place. The IRS has its deadlines, and so does every state. Keeping track of it all? Not exactly your idea of fun.
- You might be missing out on deductions. Some states let you take depreciation deductions, while others are more stingy. If you don’t know the rules, you’re leaving money on the table.
Sounds stressful? It doesn’t have to be. Let’s fix it.
The Solution: A Smarter Multi-State Tax Strategy
The goal is simple: pay what you owe but not a penny more. Here’s how to get multi-state taxes under control and make sure you’re keeping as much of your rental income as possible.
1. Figure Out Where You Actually Need to File
Not every state needs a tax return from you. Some do. Some don’t. Some states have reciprocal agreements that let you skip filing in certain places. Others? Not so much.
Here’s the rule of thumb:
✔ Own rental property there? You probably need to file.
✔ Earn money from a partnership or LLC based there? You might need to file.
✔ Spend a significant amount of time there? You could be a tax resident (even if you don’t want to be).
Pro Tip: At Insogna CPA, a trusted CPA in Austin, Texas, we go through your portfolio to make sure you’re not filing more returns than necessary or skipping a state you should be filing in.
2. Don’t Let One State Tax You Twice
Double taxation is every real estate investor’s nightmare. If you’re earning rental income in one state but live in another, you might get hit with taxes in both.
How to prevent it?
✔ State tax credits – Your home state might give you a credit for taxes paid elsewhere (but you need to claim it properly).
✔ Reciprocity agreements – Some states let you skip filing if you already pay taxes where you live.
✔ Strategic entity structuring – With the right setup, you might be able to avoid state taxes altogether.
Pro Tip: A tax advisor in Austin (that’s us!) can run the numbers and make sure you’re not overpaying.
3. Keep Up with State-Specific Deadlines
Each state has its own tax deadline, and they don’t always match the IRS schedule. Miss one? You could be looking at penalties, late fees, and extra paperwork.
How to stay ahead:
- Keep a tax calendar with deadlines for each state.
- Work with a CPA firm that tracks everything for you (like Insogna CPA, an Austin accounting firm that loves keeping investors on track).
We make sure our clients never miss a state filing deadline because penalties are not a good use of your hard-earned cash.
4. Get Every State-Specific Deduction You Deserve
Not every state plays by the same rules when it comes to tax deductions. What you can write off depends on where your property is and how you set up your rental business.
For example:
- Depreciation rules – Some states limit or disallow bonus depreciation. Others let you take the full deduction.
- Pass-through entity taxes (PTETs) – In some states, LLCs and partnerships can pay taxes at the entity level to help investors bypass federal SALT deduction limits.
- 1031 exchanges – Certain states tax 1031 exchange proceeds even if you reinvest in another property.
Pro Tip: As a leading Austin small business accountant, we dive into state tax codes to make sure you’re not missing out on deductions that could save you thousands.
5. Work with a CPA Who Specializes in Multi-State Tax Planning
Not all CPAs understand the complexities of multi-state real estate investing. If you’re dealing with multiple state tax returns, you need a firm that:
✔ Knows which states require filings and which don’t.
✔ Understands multi-state tax credits to avoid double taxation.
✔ Can help structure your real estate investments for tax efficiency.
At Insogna CPA, a top-rated CPA firm in Austin, Texas, we do more than just file your taxes—we help you plan smarter so you keep more of your money.
Why Choose Insogna CPA?
- We make taxes easy. We handle the tough stuff so you can focus on growing your real estate portfolio.
- We’re proactive, not reactive. No last-minute surprises, just smart tax strategies that keep you ahead of the game.
- We actually care. You’re not just another tax return to us. We partner with you to make sure your investments are set up for long-term success.
Stop Overpaying in Multi-State Taxes
Real estate investing shouldn’t come with a tax nightmare. Let’s fix it—together.
Schedule a consultation today with Insogna CPA, your go-to Austin, TX accountant, and let’s get your multi-state tax strategy dialed in...