Southern Maryland Rental Property Taxes
A common question that we received from potential clients and do it yourself landlords is what are the tax considerations I need to know in regards to owning a rental property in Southern Maryland?
1. When you own a rental property the IRS considers all of the rent income coming in as income just as if you were working a job. So if your income is $50000 a year and you take in $20000 in rent from the property your income according to the IRS is now $70000.
2.If you are working with a management company you will receive a 1099 form at the end of the year showing this income. If you are managing the home yourself you need to manually claim this income. However all expenses and fees associated with the rental property subtract from this income amount. This includes the mortgage, HOA, utilities, repairs, property management, leasing fees, etc.
3.If you work with Real Property Management we will send you a profit and loss statement itemizing these deductions, if you are managing yourself you need to keep all the receipts and invoices throughout the year and deduct manually.
4.The last question we receive is if my expenses on the property are higher than the rent received do I get to take the loss as a deduction against my income? The answer is yes! So if you make $50000 a year and you take in $20000 in rent on the property but you had expenses on the property of $25000 you would only be responsible for paying taxes on 45k worth of income.
As always this is just general advice please consult an Accountant for specific info regarding your home. If you have any further questions please feel free to contact us here at Real Property Management Gold at 301-392-2172