Landlord Motor Vehicle and Travel Expenses which Are Deductible
You may write off travel expenses if they are ordinary and necessary. If you are using your own motor vehicle to maintain and manage a property and/or collect rental payments from occupants, you may deduct these costs. As commuting to work is seen as a private cost, this is not permitted for tax deduction. Likewise, you may not deduct travel expenses related to making improvements on your property. This is normally recoverable using a cost recovery process such as depreciation.
Actual Expenses
Under this solution you may deduct all travel expenses tied directly to your property. All these costs needs to be documented and backed up by invoices in line with IRS Publication, 463 Chapter 5. A few software program apps can be bought by using iPod, Quick Books, Mint, and so on which will help you; nevertheless, you need to maintain physical reports to validate your deductions. This data should be claimed on either a Schedule C or Schedule E. If you own more than one property, the expenditures will have to be allotted to each individual residence where the expenses were incurred. Do not incorporate any kind of personal use or any other type of use apart from that specifically relevant to the property.
Mileage Method
You write off your actual distance traveled. You would utilize the existing standard mileage tax rate of $0.55.5 per mile traveled that tax year.
Using local transportation including Zip Cars, metro bus companies, and auto rentals must have an immediate relationship to the property, and you must have documentation to support that. If opting for public transit, it is recommended that you maintain a record of such expenses. It is a good idea to apply rental car and Zip Car expenses to a business account tied directly to your rental property.
- You can obtain the different documents outlined in this information on the IRS’s webpage. Check with IRS Publication 527 for additional information.
Woodinville CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.
