When it comes to the benefits of owning investment property, you might be focused on one thing: your returns. You can also use the tax system to your advantage! We’re going over some of the more commonly seen tax benefits, but be sure to speak to a tax attorney before making any big decisions. It’s likely you’re eligible for these tax benefits, and more.
Owning a business means that you may be able to claim some of your work expenses on taxes. With these tax breaks, you can minimize your taxable income. Be aware that excessive business expenses may call the IRS’ attention to your income tax return. Make sure you can prove your claims by having legal documents and good bookkeeping.
Tax-Free Real Estate Investments
If you have an IRA or 401(k) and acquire the property this way, it’s possible to invest in real estate without paying taxes, or deferring the taxes. This is the perfect way to invest your money while also being able get all of its tax benefits. But this is something you should speak with a professional with because it depends on a number of factors and the type of Retirement Account you have.
You may even qualify for a neighborhood beautification tax benefit, depending on your municipality. You may be able to take advantage of tax benefits that are offered in Florida. Speak with your local government about this, and find out what they recommend for you!
You might also gain some tax benefit by living in your investment property. It depends on what type of investing you do, as well as how you acquired the investment property. For example, this wouldn’t work if you acquired the property through your IRA, as you’re not allowed to live in the property that way. But if you only rent out certain rooms of your personal property, or if you have a duplex and use one half of it, you’re likely to get a tax break.
When it comes to investing, there are many benefits: the returns themselves and some tax advantages. If you want an in-depth look at how those two things interact or would work for your situation click here and enter yourself information or pick up phone call (407) 228-3682.