Motor Vehicle and Travel Business Expenses which Are Allowable for Tax Deductions for Landlords

When your business travel expenses are ordinary and necessary as they pertain to your rental property business they may be deductible. Some expenses you will be able to deduct are the costs of using your own car to obtain money from tenants or to perform maintenance at  a leasing residence. Commuting to work is a personal expense, which is not permitted for write-offs. Any kind of costs acquired as a result of journeying a distance from your own home to the property to make improvements aren’t going to be tax deductible. That is typically recovered using a cost recovery process such as depreciation.

Actual Expenses

All expenses pertaining to travel out of the home in connection with the leased premises are typically recorded with this approach. IRS Publication 463, Chapter 5 describes the way in which all these expenses must be reported and backed up with invoices or receipts. A few software apps can be found with iPod, Quick Books, Mint, and more which will help you back up your files; but you will have to keep a concrete report to support the write offs. It’s vital that these records be claimed, together with important documents , on either a Schedule C or Schedule E. For those who have more than one property, your expenditures need to be allocated to the residence where the costs were incurred. Do not include personal costs in your business deductions.

Mileage Method

Here you write off your actual distance traveled. You’d utilize today’s standard mileage taxation rate of $0.55.5 per mile.

Use of community transport including Zip Cars, metro bus companies, and auto rentals should have a direct relationship to the real estate property, and you should maintain documentation to back this. To show how your public transport use is solely business associated, it is recommended that you keep receipts of all costs and apply all charges for transport such as Zip Cars and/or automobile rentals to a business account tied directly to the rental property business.

• You can obtain the different documents outlined in this information on the IRS’s webpage. Check with IRS Publication 527 for more info.

Seattle 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.