Docstoc

2012 Year End Tax Planning Guide for Landlords, Real Estate Investors, Vacation Home Owners

Document Sample
2012 Year End Tax Planning Guide for Landlords, Real Estate Investors, Vacation Home Owners Powered By Docstoc
					    Property Management

    Made EASY!




2012

                                                                                                            Year End Tax Planning Guide
                   For Landlords, Rental Property
                 Owners, & Vacation Home Owners

Landlords, Rental Property Owners, Vacation
Home Owners - it is important to prioritize end
of the year tax planning. You can keep more
money in your pocket by taking advantage of
available tax bene ts and by tapping into new
tax saving opportunities.


Take action now to                                       SAVE on taxes!
Follow these top year-end tax tips and strate-
gies for rental property owners.


2012 Year End Tax Planning Guide for Landlords, Rental Property Owners, & Vacation Home Owners brought by

     www.TReXGlobal.com – Property Management Made EASY!
                  Property Management

                  Made EASY!
1. Time Rental Income                                                        4. Employees Health Insurance
          Income timing is a time-honored year                                  Credit
          end plan. In future, tax rates are                                               You can deduct the cost of health insurance
          expected to increase from current                                                 for any employees of your rental business.
          historical low rates. If you expect rates to go up                               Take advantage of the health insurance
  it might be better to accelerate income by receiving by                                   credit, which provides a credit worth up to
  January rental income in December. Income timing is                              35% of premium costs in 2012.
  not easy and you should consider its impact on various
  deductions.
                                                                            5. Claim Home O ce, Workshop,
 2. Accelerate Rental Expenses                                                 Garage Deduction
            There are many di erent types of                                                If requirements are met, this is one of the
            expenses that can be accelerated                                                deductions as it enables conversion of non-
            to reduce rental income for the year.                                           deductible personal expense into a tax-
            You can purchase goods and services                                             ductible rental business expense. Besides
            needed for the rental property business, and                                    deducting expenses for use of space at home
  pay the bills early. Qualifying expenses include adver-                         for o ce work, you can deduct space used as work-
  tisements for vacancies, printing, association member-                          shop for rental business. If you use your garage to
  ships, business insurance, seminar fees, education                              store your tractor to cut grass or to hold furnishings,
  courses, cell services, subscriptions, insurance, and utili-                    you can deduct expense for its use.
  ties. You can also stock up on any o ce supplies, like
  printer paper and ink cartridges.
       Interest is generally one of the largest deductible
  expenses - so you can prepay the January mortgage                          6. Hire Your Children and Put the
  payment to increase your interest expense for the cur-                        Earned Money in IRA
  rent year.                                                                                 Consider hiring your children to work for
       If you have employees that you pay for your rental                                    your rental business part-time. Deduct their
  business, prepay the withheld Social Security, Medicare,                                   compensation and it is likely you will be
  and unemployment taxes.                                                                    moving the income from high tax bracket
                                                                                             to lower tax bracket. In addition,
                                                                                             unincorporated businesses do not pay FICA
 3. Harvest Capital Gains or Losses                                                tax on wages paid to children under 18. Put the
           The low 15 percent federal long term                                    money earned in IRA account for them. It is a great
           capital gain has been extended                                          way to move money into account where it can grow
           through 2012. Consider tax loss                                         faster through tax deferral.
           harvesting to o set any current year
           gains or to accumulate losses to o set future
  capital gains that would be taxed at higher rates.



                    2012 Year End Tax Planning Guide for Landlords, Rental Property Owners, & Vacation Home Owners brought by

                         www.TReXGlobal.com – Property Management Made EASY!                                                          2
                         Property Management

                         Made EASY!
7. Casualty, Disaster Losses                                                                                   Bonus Tips
           Losses experienced by rental business
           due to casualty, disaster or theft may
                                                                                                               1. Increase Rental Property Asset
           be tax deductible. If your rental                                                                      Depreciation Expense
           business experienced a casualty or
                                                                                                                         Identify your rental property’s short life
           disaster loss, use the loss to your
                                                                                                                         assets to depreciate them faster.
  bene t. Do not forget to take the casualty and theft
                                                                                                                         Assets like air conditioners, refrigerator,
  losses because of theft, oods, etc.
                                                                                                                         carpets, clothes dryer, etc can be
                                                                                                                         depreciated over 5-year life while
8. Claim Your Automobile                                                                                        fences, patio, sidewalk, etc can be depreciated over 15
   Expenses                                                                                                     years. By separating assets and
                                                                                                                depreciating them separately, deductions are taken
           Automobile expenses paid exclusively
                                                                                                                sooner.
           for your rental business can be fully
           deductible. You can select either the
           actual expenses method instead of                                                                    2. Exclude Rental Income
           standard mileage if the automobile incurred                                                                     If you rented your vacation home or
  lot of expenses in 2012.                                                                                                 home for less than 15 days, you can
                                                                                                                           exclude the rental income on your tax
9. Claim Your Travel and                                                                                                   return. In order to avail this tax bene t,
                                                                                                                           the vacation home has to be considered a
   Entertainment Expenses                                                                                       residence. In order for the property to be considered a
             Deduct travel and entertainment ex-                                                                residence, you or your family member have to use the
             penses incurred when travelling for your                                                           home for 15 days at least. You may not be able to
             rental business. If you travel over night                                                          deduct any rental expenses but you can deduct interest,
             for your rental business, deduct your airfare,                                                     property taxes if you itemize deductions.
  hotel bills, meals and other expenses.

10. Expense Repair Costs                                                                                        3. Installment sale
          Remember that repairs are expensed in                                                                            The low 15 percent federal long term
          the year that they occur while improvements                                                                      capital gain has been extended through
          are depreciated. Deduct the full cost of repairs                                                        SOLD     2012. If you had sold a property on
          that are necessary to keep your property in                                                                      installment sale consider options of
          good working condition like xing broken                                                               triggering a gain on the contract so that you lock into
 windows, gutters, leaks, locks, painting rooms, plastering,                                                    the low 15 percent capital gain rate.
 etc.


   Remember to take action before December 31, 2012
         Everyone's tax situation is di erent, and this information should not substitute professional advice. Landlords, Rental Property Owners,
         & Vacation Home Owners should always consult with their tax advisors to consider speci c factors that might a ect their situation.
        TReXGlobal.com does not provide legal or tax counsel or advice. Everyone's tax situation is di erent, and this information should not substitute professional advice.
        Taxpayers should always consult with their tax advisors to consider speci c factors that might a ect their situation. This information is not intended to be nor can it
        be used by any taxpayer for the purpose of avoiding tax penalties. You agree to indemnify and hold harmless TReXGlobal.com for any damages or actions arising
        but of Your use of or reliance on this general information provided by TReXGlobal.com

                              2012 Year End Tax Planning Guide for Landlords, Rental Property Owners, & Vacation Home Owners brought by                                           3
                                     www.TReXGlobal.com – Property Management Made EASY!
 Property Management

 Made EASY!
Try these services from TReXGlobal.com today!




  2012 Year End Tax Planning Guide for Property Managers and Property Management Companies brought by

     www.TReXGlobal.com – Property Management Made EASY!                                                4

				
DOCUMENT INFO
Description: 2012 Year End Tax Planning Guide for Landlords, Real Estate Investors, Vacation Home Owners. Landlords, Rental Property Owners, Vacation Home Owners - it is important to prioritize end of the year tax planning. You can keep more money in your pocket by taking advantage of available tax benets and by tapping into new tax saving opportunities.