The average annual pay for a landlord in Las Vegas is $76,012, with top earners making well over six figures. Landlords can make the big bucks the more they generate rental income.
Rental income is taxable income, so landlords can save on taxes every year. Instead of paying thousands of dollars, your deductions could save you thousands.
What deductions can you expect? This rental property deductions checklist shares some of the most common ones.
Don't miss these cost-saving substractions. Keep reading to learn a few of your options.
Closing Costs
Landlords have to pay various closing costs when purchasing a rental property. You can deduct these costs the year they are incurred:
- Real estate taxes
- Interest
- Mortgage points
Other closing costs need to be added to the property basis and depreciated over the years. These costs include legal and recording fees, transfer taxes, title insurance, and surveys.
Depreciation
In a rental property deductions checklist, depreciation is a top concern. Rental property depreciation expenses must be paid back if you sell the property.
The cost of a residential building can depreciate over its useful life. According to the IRS, the useful life for a residential property is 27.5 years.
Real estate investors can claim the allowable depreciation amount as they pay depreciation recapture taxes over time.
Tenant Screening
Tenant screening is required to find quality renters and make consistent rental income. Fees paid to screen tenants can be deducted. You can also have the tenant pay for their reports when they fill out a rental application.
Tenant screening fees cover:
- Background checks
- Credit checks
- Criminal history
- Rental history
- Employment verification
The money you spend on marketing a rental vacancy is also fully tax deductible.
Property Management
You can save on income taxes when you hire a property management team. Not only can they save you money by handling property matters, but they can also help prepare you for tax season.
Property management fees commonly range from 8-10% of the monthly rent collected. These fees cover rental property responsibilities, including:
- Tenant communications
- Rent collection
- Property inspections
- Repair and maintenance coordination
- Landlord compliance
Many landlords believe that property management fees are worth the investment. Plus, the expenses are tax-deductible.
Property Taxes
In some states, property taxes are the biggest deduction for a landlord.
However, Nevada has some of the lowest property taxes in the United States. Compared to the 0.99% national average, the property tax rate is only 0.48% in Nevada.
As a Las Vegas landlord, you might not receive as large of a deduction on property taxes as landlords in states like New York or California.
Rental Property Deductions Checklist: Preparing for Tax Season
This rental property deductions checklist doesn't provide the full picture of what you can expect during tax season. To ensure you don't miss any cost-saving deductions, work with a property management team.
Avalon Realty & Oaktree Management, Inc. in Las Vegas, Nevada, is a full-service residential property management company. Broker Bonnie Barberini, received her real estate license in 1988 and has a high-level team.
We provide personalized plans to a wide range of property owners that include financial reporting. Schedule a consultation with us today to learn more about what we offer.
Bonnie is the visionary that has driven the company and culture of Avalon since 1993. Her passion is improving procedures and practices; incorporating technology and value added services for both our clients and tenants.