Select Page

It’s a given that real estate investors worry about taxes. You probably feel you are paying too much. It’s more effective to switch your focus to how you can reduce your taxes and keep more from your hard-earned investment.

The best tax strategies for real estate investors are based on keeping good records, getting organized, staying on top of the requirements for each of your investments, using the tax laws to actually build wealth and making the best use of all legal deductions. Here is a look at how you can put these strategies into action.

Keep Organized

 You don’t need to be scared of the Internal Revenue Service if you stay on top of your paperwork and keep organized records. This also works to your advantage. For example, you will know which write-offs can be accelerated, to your own benefit.

And with the records to back you up, you can change expenses that are non-deductible into deductible ones. One of the tribe of savvy real estate investors did this by paying his wife’s auto loan, which was non-deductible, with his home equity line of credit, which was deductible.

 

Leverage Tax Laws

 Get familiar with the tax laws that have the biggest influence on your current investments. Put together the most advantageous entity structures and organize your business plan accordingly. One way to put this into action would be to flip houses if you are using an S-Corporation. That way you can run your medical expenses, and certain others, through without being subject to social security taxes.

You need to pursue all of the opportunities to save on taxes that owning real estate offers you. Make the most of depreciation, expenses like a company car, the cost of travel and meals, and even office supplies and entertainment. Look at the potential for tax saving in mortgage interest and property repairs.

The more you save on taxes, the more you have to invest in your real estate ventures.

 

Take the Deductions You Are Entitled To

 Once you get your paperwork organized and your investment ducks in a row, you can look for every possible legal deduction. Use the money you save on taxes from this move and invest it.  

Real estate investors who make the most money put these strategies into action. But it can be complicated. Successful investors have learned how cost-effective it is to get accurate, professional advice.

Call the professionals at Lavan Financial Group for help in paying less and keeping more of your real estate investment.