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Michigan Rental Property Tax Deductions Explained by St. Joseph Property Management

Rental property tax deductions can be beneficial to investors who own homes. Most of the time, owning investment property is a good way to earn short and long term returns. It’s also a great tax break. Many people don’t realize these benefits of owning an investment home. Today, we’re sharing a few investment property tax benefits.

Income and Expenses

Think of your rental property as a business. When you buy and own a property, you’ll have income and expenses that you need to list on tax returns. You can deduct for things like insurance on your property and the mortgage interest you pay to finance it. You can usually deduct for utilities and property management fees if you decide to work with a professional management company.


You can also depreciate property. What this means is that the Internal Revenue Service allows you to deduct a depreciation amount from your taxes every year. To calculate this, a single family home can depreciate over 27.5 years, according to the IRS. So you take the price of your property and divide that by 27.5. The result is how much you can take in depreciation on your taxes. It’s not a cash expense with money going out the door, but this deduction does lower your taxable income.

Many times, income earned from rental property works out to be tax-free. Often if you have extra losses from a property, you can claim those and they are called passive losses. You can apply those losses to any other income you may have, and you’ll find yourself with a more favorable tax situation. All of this depends on your personal tax situation, of course, but it illustrates another benefit to owning rental property.

If you have any questions about rental property tax benefits or anything pertaining to St. Joseph property management, please contact us at Real Property Management Southwest Michigan.

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