Car and Local Travel Expenses that Are Deductible for Landlords

When the travel costs related to your rental property are ordinary and necessary and suit other certain requirements, they may be deducted. If you travel to maintain and/or operate a leasing premises, or even to obtain rental payments from tenants, you may be deduct all these expenses. The commute to work is really a personal expense and isn’t authorized for tax deduction. In addition, you cannot deduct travel expenses to make improvements on a property. A cost recovery system such as depreciation will cover that.

Actual Expenses

Most of the expenses regarding traveling from home to a leased residences may be reported in this approach. All these business expenses need to be documented and backed up with invoices and receipts as outlined by IRS Publication 463, Chapter 5. It is required you maintain physical documents for your deductions, but you’ll discover software program apps offered via iPod, Quick Books, Mint, among others that can help you maintain electronic backups of all your files. You will make all your claims on either a Schedule C or Schedule E. If you have different properties, your expenditures must be allotted to the individual property where costs were incurred. Do not include travel costs aside from those specifically pertaining to your rental property.

Mileage Method

Here you write off the cost of all miles traveled. For instance, if you traveled 1200 miles throughout 2012, you’ll utilize the present standard mileage rate of $0.55.5 per mile according to present tax rates.

Working with neighborhood transportation such as Zip Cars, metro bus services, and auto rentals, you will need to have a principal relationship to the premises and you must have documents to support this. To show that this public transit use is entirely business linked, it is advised that you maintain records and report all costs to a business account tied directly to your rental property business.

  • You can obtain the different documents outlined in this information on the IRS’s webpage. Refer to IRS Publication 527 for more information.

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Seattle CPAsAbout Seattle CPAs
CPA for Dentists+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has been the owner of Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.

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  • Huddleston Tax CPAs / Huddleston Tax CPAs – CPA 4 Dentist
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