Im about to buy a 2nd property with plans of expanding further. Im going to be setting up a business account to separate my personal expenses. If i were to buy a truck to help with the business im building but still use it for personal use can i partially claim it during taxes?
Also how does tax season work once i have a business account? Will i receive a separate tax return or will it be bundled with my other taxes? The business account is going to be set up with my social security number.
Your income from the rentals is taxable along with any other income. Rental property is a business and you can deduct your mileage for business purposes. You will need to track your miles and expenses and deduct them as expenses from your gross income. Book keeping is done in all seasons in preparation for "tax season."
Wasn't aware on the mileage... ill have to start keeping track of that. I have been keeping detailed books this year using Stessa. I heard about it on the podcast and i like it so far. I bought the house last year and i learned my lesson when it came time to do my taxes.
Take a look at the 'new' tax law - there's a way of claiming the purchase price (actual) of the vehicle instead of mileage, which will probably be advantageous if you buy new but may be of limited value if you buy used. Also if you use actual the first year you're stuck using it forever - so use it wisely.
I personally track my mileage for business and take the standard IRS per mile amount. I do this since I only have 4 houses right now. I don't use a vehicle often enough to make it worth tracking my personal mileage and deducting that from my total mileage and claiming the vehicle as a business owned vehicle. Make sure you read up on what qualifies for business mileage vs personal mileage.
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