Today we are going to briefly talk about taxes. The reason we say briefly is because taxes are a complicated topic and should only be discussed in detail by a trained professional. Having a reputable CPA or tax professional in your roster of contacts is crucial for real estate investing and property development.
Our goal for this post is to give you the right topics and the right questions and options to look in to when you are getting ready to sit down with a professional to get your taxes done. Owning property comes with some unique tax benefits. Additionally, we are also informing you of yet another advantage that real estate investing and property development has as a part of our topic series.
The tax benefits that come with real estate and property ownership allow an investor to grow their wealth over time while creating a source of continued revenue. One big example of this is rental income, since it is not subject to a self-employed tax. Additionally, the government has set some tax advantages for real estate investors. Some of the advantages are depreciation and a noticeably lower tax rate on long-term profits made through real estate investments. Based on the tax bracket you are in, meaning your level of income overall, and the your classification as a real estate investor or a professional in the real estate industry, you will most likely get some overages and tax deductions from your rental property that can benefit you and be used against your taxes on your other sources of income. We can go back to our earlier example of owning a rental property. Since a rental property is considered a business, this means that any expenses you have related to running this business, for example travel costs to check on the property or meet with future residents and so on becomes tax deductible as a business expense.
In conclusion, there are some benefits that come with this industry the trick is to be informed and to do things right, so do your research and find a good tax professional to help you navigate your way through the advantages you will gain when you go into real estate investment and property development.