CaroKim Consulting, LLC

Author: CaroKim Consulting, LLC

A certified and seasoned accountant, who can lift your tax, bookkeeping and payroll financial stress. You earned it, I can help you legally keep it. CaroKim Consulting provides individuals and small businesses with tax, bookkeeping and payroll accounting services. CPAs and Tax Accountants working at CkC aim at Lifting Your Financial Stress by; e-filing tax returns timely, accurately and confidentially. Providing clients with insightful financial recommendations, to ensure they lower their tax liability as low as legally possible. Caroline Kimani has a CPA, masters in accounting and over eight years of tax experience. She has previously worked with the IRS Volunteer Income Tax Assistant program, Koch Industries - multi-billion dollar private company, CPA firms, RaceTrac Petroleum and currently works for at a multi-national publicly traded company. Lifting Your Financial Stress

Hey there, all you awesome landlords and ladies,

Below are a few IRS tax nuggets to munch on as the year progresses.

Types of Rental Expenses

Listed below are the most common rental expenses to keep track of monthly or quarterly.

Advertising.
Auto and travel expenses.
Cleaning and maintenance.
Commissions.
Depreciation.
Insurance.
Interest (other).
Legal and other professional fees.
Local transportation expenses.
Management fees.
Mortgage interest paid to banks, etc.
Points.
Rental payments.
Repairs.
Taxes.
Utilities.

Examples of Improvements

Capital Improvement Depreciation. An expense that is not for repairing or maintaining your rental property is required to be capitalized.

Additions
Bedroom
Bathroom
Deck
Garage
Porch
Patio

Lawn & Grounds
Landscaping
Driveway
Walkway
Fence
Retaining wall
Sprinkler system
Swimming pool

Miscellaneous
Storm windows, doors
New roof
Central vacuum
Wiring upgrades
Satellite dish
Security system

Heating & Air Conditioning
Heating system
Central air conditioning
Furnace
Duct work
Central humidifier
Filtration system

Plumbing
Septic system
Water heater
Soft water system
Filtration system

Interior Improvements
Built-in appliances
Kitchen modernization
Flooring
Wall-to-wall carpeting

Insulation
Attic
Walls, floor
Pipes, duct work

Additional IRS guidelines regarding rental property can be found here: Publication 527 (2023), Residential Rental Property | Internal Revenue Service (irs.gov)

Repairs and Improvements – Improvements, Betterments, Restoration, Adaptation, De minimis safe harbor for tangible property, Safe harbor for routine maintenance.
Depreciation methods of Rental Property – MACRS Recovery Periods for Property Used in Rental Activities, Section 179 Deduction for Appliances and Furnishings.
Reporting Rental Income, Expenses, and Losses – Schedule E, Schedule C, Qualified Joint Venture (QJV), 1065
Property Changed to Rental Use
Renting Part of Property
Not Rented for Profit
Personal Use of Dwelling Unit (Including Vacation Home)
Casualty Loss Deduction

2024 Rental AOBs

Property tax season is upon us, remember you can appeal and protest rental property tax assessment increases based on reasonable valuations and comparisons.
Actively participate in the rental in 2024, you may qualify as a Real Estate Professional. This means that nonpassive income or losses are allowed, including any unallowed loss from these activities from an earlier year when you didn’t qualify.
Selling, buying or inheriting rental property in 2024, it is recommended you consult a tax attorney or QI before increasing your rental portfolio or selling your rental property to understand capital gains, depreciation recapture, other alternative options such as 1031 Exchanges, self-directed Roth IRA rentals and other proper rental planning strategies.

Rental property income and expense tracking will be made easier with a multiple tracker – to request an excel copy, kindly email caroline@carokimcpaconsulting.com.