Tax Deduction's for investment property owner

Tax Deduction's for investment property owner

Investor · NE PA, N. NJ · Member since 2020 · 30 posts · 8 votes

Hello all,

For the new year I wanted to organize my finances and maximize profits. I am currently reading Tax Free Wealth by Tom Wheelwright. 

Here is the situation: I own 2 properties in my personal name, but collect rent and pay mortgages/expenses through a LLC business account.

At most of my dinner's I talk about real estate and this deal specifically, I buy contractors lunch, and fill up my tank with gas driving there. A few month's ago the furnace had to be replaced, that would have brought my balance down lower than the mortgage amount (so I paid it on my personal card but kept receipt). Should all of this be going on my LLC's credit card? I am worried that I will run out of money in my business account and won't be able to pay for things out of the LLC checking account. What if my balance run's so low I don't have enough for the mortgage, do I just transfer from my personal account? The goal Is to eventually have enough money to keep them separate, but starting out is a weird in between time.

A majority of my income comes from my W2 job, but I am trying to lower my taxes as much as possible. Real estate seems to be the right tool for this! Thank you for taking the time to read, I know that all the responses will have to be run by my accountant and can't be taken as official legal advice. 

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Member since 2019 · 22 posts · 7 votes
4y

hello @Ashish Acharya im looking for investor friendly CPA and tax advisor, can you send me your information?

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    4y
    Originally posted by @Davis Stoner:

    Hello all,

    For the new year I wanted to organize my finances and maximize profits. I am currently reading Tax Free Wealth by Tom Wheelwright. 

    Here is the situation: I own 2 properties in my personal name, but collect rent and pay mortgages/expenses through a LLC business account.

    At most of my dinner's I talk about real estate and this deal specifically, I buy contractors lunch, and fill up my tank with gas driving there. A few month's ago the furnace had to be replaced, that would have brought my balance down lower than the mortgage amount (so I paid it on my personal card but kept receipt). Should all of this be going on my LLC's credit card? I am worried that I will run out of money in my business account and won't be able to pay for things out of the LLC checking account. What if my balance run's so low I don't have enough for the mortgage, do I just transfer from my personal account? The goal Is to eventually have enough money to keep them separate, but starting out is a weird in between time.

    A majority of my income comes from my W2 job, but I am trying to lower my taxes as much as possible. Real estate seems to be the right tool for this! Thank you for taking the time to read, I know that all the responses will have to be run by my accountant and can't be taken as official legal advice. 

    If your LLC is SMLLC, from a tax perspective (not legal), it doesn't matter who spends the money. You just need to track (do bookkeeping) correctly. You will not lose the deduction.

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  • Member since 2019 · 22 posts · 7 votes
    4y

    hello @Ashish Acharya im looking for investor friendly CPA and tax advisor, can you send me your information?

  • Investor · NE PA, N. NJ · Member since 2020 · 30 posts · 8 votes
    4y

    @Ashish Acharya Thank you for the response, that helps clear some things up. for tracking bookkeeping do you recommend saving all receipts in a file? Anything else I can do besides write It down for an accountant and save receipts.

    Also, I have an excel sheet of all my expenses that I spent fixing up one of the units. For the big stuff like subbing out the painter, flooring and furnace I have a receipt. But for a lot of Home Depot trips and small things like that I didn't save them. Can I still deduct those or is that not recommended incase I get audited. 

  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    4y
    Originally posted by @Davis Stoner:

    @Ashish Acharya Thank you for the response, that helps clear some things up. for tracking bookkeeping do you recommend saving all receipts in a file? Anything else I can do besides write It down for an accountant and save receipts.

    Also, I have an excel sheet of all my expenses that I spent fixing up one of the units. For the big stuff like subbing out the painter, flooring and furnace I have a receipt. But for a lot of Home Depot trips and small things like that I didn't save them. Can I still deduct those or is that not recommended incase I get audited. 

     Yes, save receipts. Receipts and payment proof are required to validate the expense.  

    INVESTOR FRIENDLY CPA®5241 Reviews
    TaxMD® | AI-Powered Tax Planning
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