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Tax Breaks Every Real Estate Investor Needs to Use

As a real estate investor, you are entitled to several tax breaks that can help reduce your taxable income. These are just some of the most important tax breaks that every real estate investor should be using. 

Keep in mind that these tax breaks may vary depending on your location and the type of investment property you own. So make sure you talk to an accountant or tax specialist to find out more about the specific tax breaks available to you!

Expense Deductions

One powerful tool that you can use to decrease your tax liability as a real estate investor is expense deductions – essentially subtracting the costs of owning and maintaining your property from your taxable income. 

By taking advantage of this deduction, you can potentially save hundreds or even thousands of dollars on things like repairs, materials, utilities, and more. And as it stands now, there’s no better time to capitalize on this cost-saving strategy than right now. So don’t miss out on this opportunity – start exploring the many expense deductions available to you and help make the most of your investments.

Depreciation

As a real estate investor, it is important to understand the type of tax breaks you can use. Depreciation can provide you with a significant boost if utilized appropriately. You divide your cost basis by 27.5 to determine your annual depreciation expense. 

This allows investors to obtain additional deductions, aiding in lowering their total tax liabilities. Maximizing your use of depreciation is key to gaining the most from your investments; be sure to explore what all of your options are and consult with a professional for advice and guidance.

Pass-Through Deduction

Another must-use tax break for real estate investors is the pass-through deduction—a new provision that reduces qualified businesses’ income by up to 20%, allowing investors to pay lower taxes while also reclaiming some much-needed money from their investments. Clearly, there’s no reason why any savvy investor shouldn’t be taking full advantage of these amazing deductions. By doing so, investors can substantially increase their bottom line and give themselves a better chance at long-term financial success on their investment properties.

If you own investment property, you know that your tax bill can be large. If you do your due diligence, however, you can lower your liability. Use these three tax breaks to make the most of your real estate portfolio.

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