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Tip #137:  Tax Breaks for Landlords

There’s still time to enjoy some tax incentives that benefit landlords and property managers:

Equipment Expensing and 50% Depreciation: Thanks to the Small Business Jobs Act of 2010, you can deduct up to $500,000 of equipment purchased in 2011. In addition to first year expensing, write off half the cost of new equipment on top of the regular depreciation allowance. This tax break applies only to equipment purchased in 2011.

$8000 Bonus Depreciation on Vehicles: Purchase a new car, light truck, or van before Dec 31, 2011 and if it is used more than 50 percent for business, take an additional $8000 bonus depreciation deduction.

Employee Tax Credit: Take advantage of tax credits available for hiring new. For every qualified employee, business owners are exempted from 6.2% Social Security tax, and an additional tax credit of $1000 is available.

Health Insurance Credit: Take advantage of the small business health insurance credit, which provides a credit worth up to 35%of a small business premium costs in 2011. The credit phases out gradually for businesses with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full time employees.

Was the property management business started in 2011? If so, deduct up to $10,000 of expenses paid before opening of business by taking advantage of increased deduction of startup costs.

If your business experienced a loss due to a slow economy in 2011, use the loss to your benefit. Do not forget to take these losses “ losses on sale of business assets, casualty and theft losses including natural disaster losses, uncollectible debts, and capital losses.

Remember to take action before December 31, 2011!

Everyones tax situation is different, and this information should not substitute professional advice. Landlords, Property Managers and Property Management Companies should always consult with their tax advisors to consider specific factors that might affect their situation.

This blog post is provided by SimplifyEm Pay Rent Online and Property Management SoftwareAAOA Members receive a 40% Discount.

See last weeks Landlord Quick Tip.

American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at

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