Landlord tax tips
If you are a landlord and rent out one or more of the properties you own, you could be subject to landlord tax i.e. tax on the rental income you receive, often called rental income tax This is the tax on the money you earn through the rental of your property.
As a landlord, you will be required to submit a rental income tax form to the Revenue Commissioners once a year as a proof of earnings. This form will be used to calculate the amount of tax you owe. The form can sometimes be very confusing as you decide what you should and should not declare, and which expenses you can and cannot deduct from your rental income.
A good tip is to look at the expenses that you may be able to deduct from your rental income before you submit your tax form. The deductions can be made from the gross income you earn, therefore reducing the amount of tax you have to pay. The tax on rental income can be reduced by making expense deductions such as insurance, prtb registration fees and repairs and maintenance of the property. Landlords may also be able to claim for wear and tear maintenance and insurance, as these are both expected expenses that landlords will have to pay.
Another good tip is to keep receipts and invoices for all transactions that relate to the properties you are renting. These will be essential when it is time to fill out your rental income tax form as you will have a clear record of the money you have earned and the amount of money you have spent on upkeep of the property. Thereby reducing the tax you owe if any.
But perhaps the biggest tip is to seek the help and advice of a registered professional such as a chartered accountant. Chartered accountants are highly trained and experienced in dealing with tax, mortgages and finances. They also regularly submit rental income tax forms for many businesses and individuals. By seeking the knowledge that such professionals have, you could save time and money as they help you to complete your forms correctly. They are also experienced in dealing with the deductions mentioned above, and will be able to show you exactly what you can and cannot deduct, meaning you will pay less tax on the remaining rental income after expense deductions. The less tax you have to pay, the more money you will have as income from renting your property.
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