Taxes are an essential component in any business, and real estate investing is no different. Fortunately, there are enormous tax benefits in owning residential real estate. Being strategic about taxes year-round can totally change your experience and perspective on the tax code.
On this episode, I’m explaining the three reasons why investing can eliminate high taxes. I’ll talk about why real estate investing can help lighten tax burdens, the biggest mindset change you’ll need to implement, and more. It’s all here on episode 63 of Investing in Real Estate!
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The first reason why real estate investing can help you save on your taxes is that real estate investments are tax deductions. The government wants to encourage investors to improve communities, and invest in growth. The way I look at it is, you can either write a $40,000 check to the IRS every year, or you can use that money to invest in a cash-flowing property. It’s a no-brainer!
Secondly, real estate depreciations work in your favor as an investor. This doesn’t apply to your primary residence, but investments are different. You can claim depreciation expenses on your investment properties. This can be an immense deduction, and any knowledgeable accountant will be able to help.
Additionally, some personal expenses can be business deductions. When your investing journey becomes a business, it is taxed as so. Businesses don’t pay taxes on the money they spend on business expenses. Any legitimate business purchases can be tax write-offs.
Today on the podcast, I’ll share more about the tax benefits of real estate investing. I’ll talk about finding the right accountant, specific tax strategies, and tax incentives. I’ll also explain how my personal experience with taxes has changed since becoming a real estate investor.
If you’re ready to begin building a passive income through buy and hold real estate, book a FREE call with my team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you’ll learn:
- How does the tax code favor investors?
- What is the importance of a knowledgeable accountant?
- What kinds of purchases can be written off as a real estate investor?
- In terms of taxes, how does buy and hold investing specifically differ from other types of investing?
- And much more!
EP019: How to Pay Less in Taxes – Interview with Tom Wheelwright
EP022: How to Maximize Depreciation – Interview with Tom Wheelwright
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