In the past,chances were higher that safe harbor will not make any difference to your tax liability. But with the additional allowance to deduct up to $25K of your passive losses from other income, (if one qualifies) has changed that for some, even if not by much.
Typically, rental property will operate at a loss every year. Especially if the property has a mortgage on it. As I'm sure you're aware rental income is passive, so rental expenses are passive also. Passive losses can only be deducted from passive gains (without taking into consideration the $25K mentioned above.) So once your passive losses gets your taxable passive gain to zero, that's it. You're done. Any remaining losses are just carried over to the next year.
So with each passing year it's perfectly possible that the passive loss carry over will just continue to grow. Those losses can't be realized until the property is sold or otherwise disposed of.
Typically, when you add up the deductible rental expenses of mortgage interest, property taxes, property insurance and add that to the depreciation you're required to claim each year, those items alone will generally exceed the total rental income received for the year. Add to that the other allowed rental expenses one can deduct, and you're almost guaranteed to have a loss every year.
Therefore, claiming the de-minimus safe-harbor so you can expense a qualified property improvement, doesn't always help reduce your taxable income in the year you claim the safe-harbor. It just gets added to the carry over losses and carried over. It just won't come into play until the tax year you sell or otherwise dispose of the property.
Additionally, when you expense something that you would otherwise depreciate, if that 'Something" is lost, destroyed, damaged, etc, the loss does not reduce your cost basis in the property - which if it did, would in turn reduce the amount of depreciation you are required to take each year *if* you had capitalized it.
Basically, there's pros and cons both ways. But it's up to the tax filer to figure out if the pros are more beneficial than the cons are hurtful.
Finally, keep in mind that just because something that qualifies as an asset cost less than $2,500, does not mean it qualifies for safe-harbor. The cost aspect is only one of the requirements that need to be met for an item to qualify under safe harbor.
Then there's the other "safe harbor" that has absolutely nothing to do with the above. That's the one for QBI which is addressed in IRS Revenue Procedure 2019-38 at https://www.irs.gov/pub/irs-drop/rp-19-38.pdf
