Tax Benefits for Real Estate Investors 2018

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When it comes to taxes, there’s never been a better time to be a real estate investor. The new 2018 tax code contains incredible ways for real estate investors to keep more money in their pockets. In fact, taxes are the number one way that investors make money! In this post, we're sharing five incredible ways real estate investors can benefit from the 2018 tax code! 

  1. Corporate Tax Rate. One of the biggest changes in the new tax law is how businesses are taxed. Previously, businesses were taxed at a rate of 35%. Starting in 2018, businesses will now benefit from a permanently lower tax rate of only 21%. 
  2. Pass-Through Deduction. A last minute provision to the tax law also positively effects investors. This permits pass-through entities, such as an LLC, to take a 20% deduction on passive income.
  3. Business Equipment Deduction. Starting this year, the tax code has broadened the spectrum of "business equipment." Now real estate investors can reap the benefit of deducting equipment for rental properties. The definition has been expanded to include roofs, HVAC systems, fire alarms, and much more. 
  4. Hiring children. In the new tax code, the government has doubled the exemption for hiring children. We’ve discussed on the podcast before how we legally pay our children to do administrative tasks; but now we can pay them more, and pay less in overall taxes.
  5. Estate Taxes. Now, assets can be passed down without having to pay huge taxes. The estate tax exclusion has doubled for both single and married investors. 

To learn more about saving on taxes, we highly recommend Tom Wheelwright's book, Tax-Free Wealth! 

 When it comes to taxes, there’s never been a better time to be a real estate investor. The new 2018 tax code contains incredible ways for real estate investors to keep more money in their pockets.