A Seattle Property Management Guide to Rental Property Tax Deductions

Published October 26, 2023. Updated June 4, 2024. 

Being a Seattle rental property owner can be a great feeling: you're building a lasting legacy for yourself and your family—plus, it’s a great source of long-term income! However, to experience the benefits of real estate and the Seattle rental market to the fullest, you must manage your property and your rental property tax deductions carefully.

The investments that you put into your rental property, including the normal, everyday expenses that you spend money on as a property owner, can be deducted from your taxes—granted that you don’t spend an 'unusual' amount on them, of course. 

If you want to learn how to navigate the world of tax deductions, consider the following guide a crash course on the subject from your Seattle property management team here at Real Property Associates!

Please note: This article is not legal advice. For up-to-date information and guidance, reach out to your attorney, tax professional, or Real Property Associates.

Professional Avenue

If you're more of a 'hands-off' rental property owner, it’s safe to assume that you’ve enlisted the help of an attorney, an accountant, and perhaps even full-service property management to help set up and operate your business. The money you spend on these and other professional services is not money wasted, and you can get a good tax deduction on these business services!

It’s a win-win situation; you get expert help as a rental home investor, adding credibility to your rental property portfolio while giving yourself a well-deserved tax break. It makes relying on the professionals to assist you in the day-to-day management of your rental properties all the more rewarding.

Office Supplies

It doesn’t matter if you’re running your rental property from the comfort of your home or in a corporate office; as long as you’ve spent some cash on office supplies and you keep up to date files, you qualify for rental property tax deductions. 

What if you have a workshop that you want to invest in?

• Find out what the IRS definition of a workshop is to make sure that you don’t end up throwing money away.

• The best way to benefit from tax deductions is to keep things straight, narrow, and to the letter.

• Find out exactly what’s expected of you in the Seattle area and operate accordingly.

Business Insurance

This a big one because you can cut down a huge part of your tax bill by deducting your insurance fees. Whatever type of insurance you have on your rental property, don’t take it for granted! You’re entitled to deduct whatever insurance you have on your business, including the building itself.

If you’re running your real estate business from home (like so many property owners right now), you can even get a tax deduction from your homeowner’s insurance. However, this will only apply if your home office qualifies as an office. 

• Go back and examine all of the insurance that you've accumulated for your business.
• You need every deduction you can get if you want to turn a decent profit this year!

Business Insurance

This a big one because you can cut down a huge part of your tax bill by deducting your insurance fees. Whatever type of insurance you have on your rental property, don’t take it for granted! You’re entitled to deduct whatever insurance you have on your business, including the building itself.

If you’re running your real estate business from home (like so many rental property owners right now), you can even get a tax deduction from your homeowner’s insurance. However, this will only apply if your home office qualifies as an office. 

• Go back and examine all of the insurance that you've accumulated for your business.

• You need every deduction you can get if you want to turn a decent profit this year!

Business Trips

We often take for granted the costs that come with transportation and logistics. Fuel is not cheap, and assuming that you have to travel a lot for business or to check on your rental properties from afar, it would do you well to figure out how to deduct travel costs from your taxes. 

• You use fuel to get to your rental property when a maintenance request calls for it.

• You spend money picking up all those supplies you need for your business.

• Don’t neglect to count these expenses as part of your tax deduction!

When added up, they really make a dent in your bank account.

If you're not sure exactly which trips qualify, run it by your accountant or your qualified Seattle property management team.

Repairs

As Seattle rental property managers often say, preventing maintenance issues with routine repairs is the best way to go. You can kill two birds with one stone in this regard, pleasing your renters by showing you care about their living conditions while getting a pretty tax deduction. 

• Whether you need to fix a leaking pipe or the walls need plastering, this is your chance to get a tax deduction. Before you even try anything though just know that it has to be a repair—not an upgrade. 

• Upgrades are not tax-deductible. If something seems to be in the grey area between repairs and upgrades, you’ll have to consult a real estate expert like one of the many Seattle rental property managers available for clarification.

Home Free

That wasn’t so hard, was it? Now that you know a thing or two about tax deductions for Seattle property owners, you can rest easy knowing that the IRS won’t give you any trouble. Just make sure to maintain up-to-date records of all of your expenses like a responsible investor! Doing this and following the tips we just went over will make your life that much easier come tax season. 

It's also worth consulting your property management company if you find yourself in a grey area. We happen to have a wealth of knowledge on the subject, gained from countless seasons of dealing with the ever-evolving tax system. 

Don’t have a rental property manager yet? Download our helpful Guide to Finding the Best Property Management Company in Seattle to vet your future partner!