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tax tips: 5 Year End Tax Saving Strategies for 2009 - 12/31/09 04:00 PM
You can save on 2009 taxes by taking action before the end of the year. As always you should always consult with your accountant or tax consultant on how these tax strategies apply to your personal situation. Also the tax tail should never wag the business dog.
Be sure to take action on these tax strategies if they put more money in your pocket:
1. Buy a heavy SUV to haul your tools around and deduct up to $25,000 in depreciation expense. New and pre-owned "heavy" SUVs used over 50% for business qualify for a first-year Section 179 depreciation write-off of … (1 comments)
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tax tips: 25 Minute Webinar this Friday - 04/22/09 03:29 PM
No one ever believes me about this webinar, and I don't blame them. I know it's the greatest thing since sliced bread, but convincing others is not such an easy task. So I'll leave it up to the pros!
… (0 comments)
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tax tips: Real Estate Taxes - 04/15/09 01:17 PM
Last Minute Tax Tip - Real Estate Taxes
Taxes paid on property assessed by a local government or other taxing authority are deductible when paid.
Common fees include taxes paid to your city, county, or school district.
If you have a mortgage, usually the total amount is reported on your mortgage interest statement (IRS Form 1098). In addition to real estate taxes, the interest recipient may use box 5 to give you other information, like the address of the property that secures the debt, and insurance paid from escrow.
Real estate taxes get reported on Schedule E if … (0 comments)
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tax tips: Why You Should HIRE FAMILY MEMBERS - 04/14/09 03:42 PM
Last Minute Tax Tip - Hire Family Members to Manage Your Properties
Property management fees are fully deductible, so consider hiring someone that you don't mind paying, like a family member.
Obviously, the expense of your own labor cannot be written off, but that doesn't mean your spouse or children have to work for free.
By hiring family members, it won't bother you to pay management fees because the expense is fully deductible, and the money stays within your family :)
Keep in mind you'll have to withhold Social Security and Medicare taxes for the income you pay.
AND … (17 comments)
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tax tips: WALK AWAY FROM INVESTORS... and tell them to never come back - 04/14/09 02:07 PM
Investor Marketing Tip - WALK AWAY from investors
Click here for tips A-Z
Walk away from all your investor clients and prospects. Tell them you don’t need to do business with them. Your website can do it for you! Just don’t add anything of value to investors onto your website, and they'll never come back to you every 2.2 years. It’s as simple as that!
You can also get closer to all your investor clients and prospects. Tell them why they should do business with you. Your website can do it for you! Just add something of value to investors … (2 comments)
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tax tips: Collecting in Advance - 04/13/09 03:27 PM
Last Minute Tax Tip - Collect Rent in Advance to Offset Loss Carryovers
One main benefit of owning rental property is being able report a loss, but some taxpayers cannot take advantage of this tax shelter due to high income loss limitations. Their losses get carried forward, and cannot get deducted until they are offset with future income.
If your rental expenses exceed rental income, and your AGI limitations do not allow you to claim a loss, you can decrease the loss carryover by increasing rental income. Since rental income is taxable in the year it is collected, rental losses … (0 comments)
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tax tips: Traveling Away From Home - 04/12/09 01:09 PM
Last Minute Tax Tip - Traveling Away from Home
You can deduct the expense of traveling away from home if the primary purpose of the trip was to collect rental income or to manage, conserve, or maintain rental property.
You can also deduct expenses incurred while staying overnight when traveling for business. You cannot deduct the cost of traveling away from home if the primary purpose of the trip was the improvement of your property. You can read Publication 463 to learn the specifics.
Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should … (3 comments)
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tax tips: Expenses that can be Written Off Immediately - 04/09/09 12:54 PM
Last Minute Tax Tip - Repairs due to Vandalism can be Expensed Immediately
If rental property is damaged by vandalism, the cost of repairing the property to its previous condition is immediately deductible instead of being capitalized and depreciated.
For example, say you replaced an entire window frame on your property. Normally the cost would get added back to the basis and depreciated because windows are a component of the building structure (depreciated over 27.5 years). However, since the improvement is the result of vandalism, it is treated like a repair, and the costs are deducted in the year the … (1 comments)
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tax tips: 1 out of 5 Buyers is WHAT? - 04/08/09 05:29 PM
1 out of every 5 buyers is an investor!!!
This was again confirmed by NAR in their latest annual study on second homes and investment purchases. They found that purchases for investment purposes accounted for more than one out of five home sales in 2008. Second homes and vacation property purchases dropped last year to 9 percent of the total market, down from 14 percent in 2006.
Here are some other interesting findings:
66% of what investors purchased last year was detached single family units, 22% were condos or duplexes, and only 8% of purchases were multi-units, attached townhouses, … (11 comments)
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tax tips: Giving Gifts that Lower Taxes - 04/07/09 01:53 PM
Last Minute Tax Tip - Giving Gifts and Lowering Taxes
If you give gifts in the course of your business, you can deduct all or part of the cost, but you cannot deduct more than $25 for each business gift that you gave away during the tax year.
A gift that is intended for the eventual personal use or benefit of a particular person or class of people will be considered a gift to that person or class of people. If you give a gift to a member of a customer's family, the gift is generally considered to be an … (2 comments)
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tax tips: Pay your Kids, so they can Pay for Themselves! - 04/06/09 05:02 PM
Last Minute Tax Tip - Pay your Kids and Open their IRAs
If it looks like you will have a large taxable liability at the end of the year, it's not a bad idea to hire your kids to landscape your rentals.
You can pay your kids to do work on your properties, and put the money in IRA accounts for them. This is especially a good idea if you’ve already maxed out on your and your spouse’s IRA contribution for the year. You’re better off avoiding the taxes on your extra income, and the money will be safe in … (9 comments)
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tax tips: Owners can Sell Property to Themselves? - 04/05/09 01:37 PM
Last Minute Tax Tip - Sell Property to Yourself
Selling property to your own S-Corporation may be beneficial in some specific situations, like if you are trying to meet requirements for the two year rule ($250/500k exclusion), or if you are trying to take advantage of depreciation on appreciated property.
For example, say you lived in a property for three years, and rented it out for the next seven years - since you haven't lived there for two out of the last five years, you cannot sell the property as a primary residence to avoid the capital gain. However, after … (4 comments)
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tax tips: Writing Off the Cost of Tenants - 04/02/09 01:13 PM
Last Minute Tax Tip - Deducting Tenant Utilities that the Landlord Pays
Utilities paid by the landlord for tenant use are fully deductible, provided that this is part of the rental agreement.
Landlords often incur expenses to light common areas or operate security systems on their properties. Other common expenses include power, water, gas, and cable, and internet.
Any utility costs incurred during a period of vacancy are also fully deductible - but be careful. Deducting large expenses during periods of vacancy can be a reason for the IRS to become suspicious.
Everyone's tax situation is different, … (5 comments)
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tax tips: Amortizing Loan Costs - 04/01/09 03:58 PM
Last Minute Tax Tip - Loan Costs need to be Amortized
You can maximize your tax savings by deducting all of your loan costs. Loan costs do not add value to your property (like title charges), and must be amortized over the life of your loan (and not depreciated with the property basis.)
Find your amortization deduction by adding all the loan costs from your property's settlement statement and dividing by the loan term (30 years, etc...). The yearly amortization deduction gets reported on IRS form 4562 for the life of the loan. If you refinance the property, you will … (0 comments)
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tax tips: Ordinary and Necessary Advertising Expenses - 03/31/09 02:45 PM
Last Minute Tax Tip - Ordinary and Necessary Advertising Expenses
Be sure to deduct any advertising expenses that are considered “ordinary and necessary” for your rental property.
Common expenses can be advertisements on the radio, in the newspaper, classified lists, and phone books. Other expenses may include the cost of signs, banners, and postage for mailers. You can even deduct the cost of advertising for vacancies, including the cost of building a web site – just be sure that they are “ordinary and necessary” for your rental activity.
Click here for the other tips. To learn more about saving money … (6 comments)
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tax tips: Deducting the Cost of Looking for Property While on Vacation - 03/30/09 08:35 PM
Last Minute Tax Tip - LOOKING for new property while on vacation
Be sure to deduct the cost of expenses incurred while looking for new property. Travel expenses in connection with the management of your investments are tax deductible if they are ordinary and necessary.
At least half of the time you spent away on travel must have been spent doing business, and the primary cause for travel must be business. Common business expenses that you can deduct while scouting for new investment properties are fees for travel, lodging, and services.
Click here for the other tips. To learn more … (4 comments)
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tax tips: Last Minute Tax Tip - Minimizing Taxes using Sale Expenses - 03/26/09 04:45 PM
Last Minute Tax Tip - Minimize Taxable gain using Sale Expenses
Many real estate investors overlook deductions when they sell their property. If you sold your rental property for a gain, make sure to minimize taxes by accounting for sale expenses - like closing costs, which can be found on the property's settlement statement.
You should deduct Commissions Paid, Title Charges, Recording and Transfer Charges, and Additional Settlement Costs from the Contract Sales Price. This will help you minimize gain, and lower the tax liability on your sold property.
Be sure to share these tips, and click here for more. … (0 comments)
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tax tips: Expanded Tax Break for First Time Home Buyers - 02/25/09 01:56 PM
The IRS announced that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before December 1st can take the tax credit either on their 2008 tax returns this year or on their 2009 tax returns next year. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000 ($4,000 for married individuals filing separately), and the amount of credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, … (2 comments)
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tax tips: New federal tax break for first-time home buyers - 02/23/09 05:45 PM
Here are details of the new federal tax break for first-time home buyers:
– It’s for new and existing homes purchased between Jan. 1 and Dec. 1, 2009.
– Buyers get a tax break equal to 10% of the purchase price, up to $8,000.
– It does not have to be repaid. (Last year, buyers got $7,500 tax credits for homes bought between April 9, 2008, and Jan. 1, 2009, but had to repay over 15 years, interest-free).
– Singles must earn less than $75,000 a year. Married couples can qualify with joint annual incomes up to $150,000.
As a … (3 comments)
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tax tips: Have you told Clients and Prospects about the 41 Tax Deductions they're entitled to? - 02/23/09 05:19 PM
With the current uncertainties in our economic environment, and even tougher times possibly ahead of us, your investor prospects and clients are in a position where they are looking for more ways to save and hold on to every penny they have.
Did you know that there are 41 different expenses that a rental property owner can write-off to put more money in their pocket this tax season?
Don’t let your clients pay more than they need to!
If your investor prospects or clients don’t know about these 41 different expenses they can write-off, they are definitely paying more … (5 comments)
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Niman Singh
Fremont,
CA
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TReXGlobal
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