Bradford Publishing Blog | Colorado Law Articles & Topics

An Easy Way to Track Rental Tax Deductions

By Victor M. Grimm, Esq. and Rachel Brand

For many landlords, perfect records are an ideal to be aimed for, perhaps not ever achieved. We know how it is. You’re busy; things get lost; and you have a generally good relationship with your tenants. In two previous posts, we talked about keeping property maintenance records, landlord-tenant correspondence, a rent ledger and rental criteria/property showing records.

In this final post on landlord record-keeping, we focused on something that directly affects your bottom line: a record of income and rental tax deductions.

Income and expense records

Even the most laid-back landlords can appreciate the importance of tracking income and expenses–because doing so can help you pay fewer taxes. For best results, track rental income and expenses every month. Don’t wait until the end of the year to do this because you’re likely to forget about small outlays.
Some common landlord rental tax deductions include:

•    Necessary repair and maintenance costs. Good examples include amounts paid for gutter cleaning, landscaping, show shoveling, new appliances, fixing leaks, and repainting.
•    House cleaning in between rentals.
•    Maintenance for empty rentals.
•    Fees paid to people who help maintain or manage your property (including a property management company).
•    Advertising costs, including the cost of buying a sign or placing an advertisement in the classifieds.
•    Insurance.
•    Legal and professional services, such as attorney’s fees and legal forms, fees paid to real estate investment advisors, and tax preparation fees.
•     Local travel, including mileage to and from your rental property and trips to the hardware store to buy parts for repairs.

Of course, you will also be deducting property taxes and interest payments.  For a detailed understanding of the best way to categorize your expenses, consider talking to a tax accountant who specializes in rental property. 

For more information, see the Landlord & Tenant Guide to Colorado Leases and Evictions, 4th Edition, by Victor M. Grimm, Esq. and Denise E. Grimm.

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