When you have a rental property, you can take certain expenses and deduct them from your rental income, if you active participate in your rental property. This means, you must own at least 10% of the property and you made major management decisions for this property such as approving tenants and authorizing repairs.
Some examples of deductible expenses are:
- Real estate taxes
- Insurance premiums
- Repairs
- Cleaning / Maintenance
- Mortgage interest
- Utilities (if paid for tenant)
- Vehicle expenses for rental purposes like mileage to the property for maintenance and repairs, to the bank to take care of rental property accounts or to the post office to mail rent receipts and back home
- Airfare, hotels and rental cars to travel to the rental property and back home
- Management fees for property management companies, property managers or on-site managers
- Professional and legal fees for tax prep and accounting advice and legal advice for rental matters
- Advertising
- Depreciation and Improvements on the property.
It is important to keep all the receipts for the expenses and keep track of the mileage.
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