Tax deduction overview
If you receive rental income from the rental of a dwelling unit, there are certain rental expenses you may deduct on your tax return.
When Are Travel Expenses Are Deductible?
For tax purposes, travel expenses are the amounts you spend when you travel away from your tax home overnight for your rental income activity. You don't have to travel any set distance to take a travel expense deduction. However, you can't take this deduction if you just spend the night in a motel across town.
Are travel expenses deductible for landlords?
If you own and/or manage rental properties that are outside of your local market, and you travel overnight for the purpose of managing, maintaining, or performing other tasks related to the properties, you may be able to deduct your reasonable expenses related to the trip. One key point before we go any further is that the IRS tends to take a closer look at deductions that have a lot of potential for abuse, and this is certainly one of them.
Alternatives - Local Travel Expenses
Calculating mileage the car travels:
The standard mileage rate is the simplest way to deduct local travel expenses because it requires the least amount of tracking. Simply take the number of miles you drove for business and multiply it by the standard mileage rate to get your deduction. The standard deduction for 2019 and 2020 is 58 cents per mile. You must travel outside your city limits. If you don't live in a city, you must go outside the general area where your tax home is located.
Regardless of the circumstances of your rental investment activity, you will likely be asked to record the following:
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