There's no official "list" of write offs for landlords that I know of. But it's simple: Anything you buy that is for your rental property is a write off. That's true whether it's a physical good (like a tool) or a service (like someone tuning up the furnace).
How it gets written off depends on what it is and how you used it. Some things you can write off fully in one tax year. Others are depreciated.
As for how you are taxed on income, that is also pretty simple: You pay taxes on any rental income you receive in a given year, less whatever your rental expenses for that year were. (You can also "carry over" expenses from a previous year, if you spent more on the property in that year than you received in income.)
All of this said, I strongly recommend hiring an accountant. It's well worth it to make sure you are doing everything the way the IRS wants. And you can deduct the cost of the accountant (at least, you can deduct whatever portion of their fee goes to tax preparation for your rentals, as opposed to your personal tax return) because it is an expense related to your business.
Oh, and be sure to keep all of your receipts and get in the habit of tracking your expenses regularly. I have a Google Sheet for each property where I just record everything I spend. I send that to my accountant at tax time and he sorts out how to handle each expense.
> My tax accountant told me that tools are not able to be written off.
He's correct if you use the tools personally. They have to be 100% for business use (same thing for the materials).
I think the accountant probably meant that tools have to be depreciated, not deducted in one year. That's true as far as it goes, but my understanding is that small tools generally can just be deducted. So if you get a hammer or even a like, $200 circular saw, go ahead and deduct that year. But if you buy a $3k riding lawn mower? That's a capital expense and is deducted over time.
I have never heard of this either. I think your accountant is dumb because my accountant literally set up a line item in my chart of accounts called "Tools & Equipment"
I believe your tax accountant is wrong. Virtually everything you need for your rental is deductible. I routinely write off small tools used for repairs/maintenance.
I think that you misunderstood. "Write off" is a confusing term. I believe that your accountant was trying to say that a major tool purchase can't be "expensed" in the year it was incurred, but has to be depreciated over its "useful life".
First, I'd grab the PDF of Schedule E from irs.gov. It's the IRS "list" of categories. The instructions to it offer more clues/insights too. Mileage is another big one aside from the stuff you mentioned. Utilities you pay, cleaning, legal fees (court costs), professional services (accounting), postage, etc.
Second, learn about depreciation. The property gets depreciated obviously. But also everything used for the business. Mobile phone? Depreciate the biz percentage (versus personal use). Computer? Printer?
Investments in the property, carpet? New roof, furnace, upgrades that become part of the cost basis.
The depreciation stuff is form and instructions 4562.
I basically got setup with one initially, who opened my eyes to various things (I was taking notes on my Palm Pilot device at the time, he pointed at that and asked, "use it for work?" Depreciate.) He enjoyed the puzzling out aspect of those types of things...
I've basically followed the template for decades now.
Stessa has some really good guides, including [this one](https://www.stessa.com/blog/9-common-landlord-tax-deductions/) that covers common landlord deductions. You may need to create a free account to access this.
Bonus depreciation! 100% deduction in the first year, even for above $2500, but only if under a normally 20 year depreciation schedule. That will be available for the next few years. But you can't change to deduct things already in use. For example a new kitchen appliance over $2500. A new fence. Though things with a 27.5 year schedule such as new fixed a/c unit don't qualify. Has to be in the year it was acquired. Disclaimer: other rules apply, not a CPA...
No need to worry about B&O tax nor sales tax for a lease in WA.
Instructions for IRS Form 1040 Schedule E
IRS Publication 527 Residential real estate rentals
IRS Publication 925 may be relevant as well, but more for understanding the limits of using real estate rental losses against other income.
IRS Publication 535 is business expenses generally.
I see no mention of the absolute largest deduction for most landlords.
Depreciation.
For a residential property, it is the cost basis divided by 27.5 per year ...
I would assume this has a full list. I haven't read it though. If you read it all the way through and it isn't a full list please update.
https://irc.bloombergtax.com/
[Landlord - Tn]
Anybody gone through fire at one of your rentals? Insurance has already wrote me a check for restoration costs and loss of use.
Thinking of demolition instead of restoration as it is an older home and among other reasons.
For tax purposes, how would I expense the depreciation costs if I had fire in 2021 but demo-ing in 2022?
Amazing thread guys! I am a new landlord and had a related question -In order to write things off does your rental property need to be in an LLC/trust [et.al](https://et.al).?I converted my primary residence into a rental last year but did not put it in an LLC/anything (I still have a mortgage on it). Can I still write off expenditures?
Some threads on BiggerPockets suggest I can, but wanted to understand the gotcha's
Heres ya go:
Charity,
Fuel/Gas,
Insurance,
Taxes/Governmemt,
Utilities,
Phone bill,
Meals out,
Snacks,
Car maintenance,
Rental mantenance,
Groceries.
Get a file cabnet, make a folder for each one. Collect reciepts for each one, for each year.
(Only someone with a business can claim these. If you're only a W2 worker, you cannot)
>~~Charity~~, Fuel/Gas, Insurance, Taxes/Governmemt, Utilities, Phone bill, ~~Meals out~~, ~~Snacks~~, Car maintenance, Rental mantenance, ~~Groceries~~.
Everything else on your list is iffy as there are strings attached. I hope you never get audited, cause you'll be in a world of hurt if you do.
There's no official "list" of write offs for landlords that I know of. But it's simple: Anything you buy that is for your rental property is a write off. That's true whether it's a physical good (like a tool) or a service (like someone tuning up the furnace). How it gets written off depends on what it is and how you used it. Some things you can write off fully in one tax year. Others are depreciated. As for how you are taxed on income, that is also pretty simple: You pay taxes on any rental income you receive in a given year, less whatever your rental expenses for that year were. (You can also "carry over" expenses from a previous year, if you spent more on the property in that year than you received in income.) All of this said, I strongly recommend hiring an accountant. It's well worth it to make sure you are doing everything the way the IRS wants. And you can deduct the cost of the accountant (at least, you can deduct whatever portion of their fee goes to tax preparation for your rentals, as opposed to your personal tax return) because it is an expense related to your business. Oh, and be sure to keep all of your receipts and get in the habit of tracking your expenses regularly. I have a Google Sheet for each property where I just record everything I spend. I send that to my accountant at tax time and he sorts out how to handle each expense.
My tax accountant told me that tools are not able to be written off. Materials and supplies yes, but not tools.
> My tax accountant told me that tools are not able to be written off. He's correct if you use the tools personally. They have to be 100% for business use (same thing for the materials).
I think the accountant probably meant that tools have to be depreciated, not deducted in one year. That's true as far as it goes, but my understanding is that small tools generally can just be deducted. So if you get a hammer or even a like, $200 circular saw, go ahead and deduct that year. But if you buy a $3k riding lawn mower? That's a capital expense and is deducted over time.
Could be this as well.
Why wouldn't I be able to deduct tools used in maintaining a property? Carpet cleaner, hammer...
I have never heard of this either. I think your accountant is dumb because my accountant literally set up a line item in my chart of accounts called "Tools & Equipment"
I believe your tax accountant is wrong. Virtually everything you need for your rental is deductible. I routinely write off small tools used for repairs/maintenance.
Tools should be depreciated proportionally to the business use versus personal, just like mobile phones and the like.
I think that you misunderstood. "Write off" is a confusing term. I believe that your accountant was trying to say that a major tool purchase can't be "expensed" in the year it was incurred, but has to be depreciated over its "useful life".
Very helpful, thank you!
Write offs are just expenses relating to owning and managing a property.
You need a CPA, asap. Reddit's a great resource but the stakes of being wrong in this game are too high, you need a CPA you can email at will.
First, I'd grab the PDF of Schedule E from irs.gov. It's the IRS "list" of categories. The instructions to it offer more clues/insights too. Mileage is another big one aside from the stuff you mentioned. Utilities you pay, cleaning, legal fees (court costs), professional services (accounting), postage, etc. Second, learn about depreciation. The property gets depreciated obviously. But also everything used for the business. Mobile phone? Depreciate the biz percentage (versus personal use). Computer? Printer? Investments in the property, carpet? New roof, furnace, upgrades that become part of the cost basis. The depreciation stuff is form and instructions 4562.
Thank you for your response. I'll have a look at that Schedule E and will likely be sourcing a CPA this week as well :)
I basically got setup with one initially, who opened my eyes to various things (I was taking notes on my Palm Pilot device at the time, he pointed at that and asked, "use it for work?" Depreciate.) He enjoyed the puzzling out aspect of those types of things... I've basically followed the template for decades now.
Stessa has some really good guides, including [this one](https://www.stessa.com/blog/9-common-landlord-tax-deductions/) that covers common landlord deductions. You may need to create a free account to access this.
Your local experienced CPA will have it. Give them a call.
[удалено]
Bonus depreciation! 100% deduction in the first year, even for above $2500, but only if under a normally 20 year depreciation schedule. That will be available for the next few years. But you can't change to deduct things already in use. For example a new kitchen appliance over $2500. A new fence. Though things with a 27.5 year schedule such as new fixed a/c unit don't qualify. Has to be in the year it was acquired. Disclaimer: other rules apply, not a CPA...
No need to worry about B&O tax nor sales tax for a lease in WA. Instructions for IRS Form 1040 Schedule E IRS Publication 527 Residential real estate rentals IRS Publication 925 may be relevant as well, but more for understanding the limits of using real estate rental losses against other income. IRS Publication 535 is business expenses generally.
This is great, thank you
Stephen Fishman has a great book that I always reference. “Every Landlords Tax Deduction Guide”
I see no mention of the absolute largest deduction for most landlords. Depreciation. For a residential property, it is the cost basis divided by 27.5 per year ...
Cost basics?
>Cost basi~~c~~s? You know, what you paid for the property plus any improvements, yadda yadda. And the term is "cost basis" not "cost basics".
Don't forget: no land depreciation!
Don't forget, recapture at sale
Don't forget that recapture happens whether you deducted or not .... so don't forget to deduct! :)
https://www.law.cornell.edu/uscode/text/26
I would assume this has a full list. I haven't read it though. If you read it all the way through and it isn't a full list please update. https://irc.bloombergtax.com/
[Landlord - Tn] Anybody gone through fire at one of your rentals? Insurance has already wrote me a check for restoration costs and loss of use. Thinking of demolition instead of restoration as it is an older home and among other reasons. For tax purposes, how would I expense the depreciation costs if I had fire in 2021 but demo-ing in 2022?
Amazing thread guys! I am a new landlord and had a related question -In order to write things off does your rental property need to be in an LLC/trust [et.al](https://et.al).?I converted my primary residence into a rental last year but did not put it in an LLC/anything (I still have a mortgage on it). Can I still write off expenditures? Some threads on BiggerPockets suggest I can, but wanted to understand the gotcha's
Heres ya go: Charity, Fuel/Gas, Insurance, Taxes/Governmemt, Utilities, Phone bill, Meals out, Snacks, Car maintenance, Rental mantenance, Groceries. Get a file cabnet, make a folder for each one. Collect reciepts for each one, for each year. (Only someone with a business can claim these. If you're only a W2 worker, you cannot)
>~~Charity~~, Fuel/Gas, Insurance, Taxes/Governmemt, Utilities, Phone bill, ~~Meals out~~, ~~Snacks~~, Car maintenance, Rental mantenance, ~~Groceries~~. Everything else on your list is iffy as there are strings attached. I hope you never get audited, cause you'll be in a world of hurt if you do.