Everybody wants to maximize his or her tax savings but the question is how do you maximize your tax savings? One of the best ways of creating wealth today is by investing in properties because most investments raise a lot of income and they keep on appreciating day in day out. Most investors are usually interested on the capital gain of their investments or businesses and not the losses that they incur. As an investor, the more the deductions that you claim on your property the more the tax benefits or tax returns. Some of the six smart ways you can claim to maximize your tax savings are:
Repairs and maintenance
Repairs and maintenance are very necessary especially on an investment. This is because it makes the investments to retain their original state and even have a longer economic life. Restoring an investment or property to its original position is tax deductible provided the damage you are repairing is not the initial one or is not that which existed when the property was bought. Such costs therefore lead to deduction of capital works or depreciation.
The costs of tenancy
Tenancy costs are also worthy considering when you want to maximize your tax savings. Fees paid to managers of properties who procure your investments and the costs incurred when you are advertising for tenants are tax-deductible. The same tax also applies in case of any expenses associated with varying or the preparation of a lease with any or all your tenants. There are some costs that are not tax deductible such as those used in buying assets that have depreciated or those associated with structural improvements and this is because they are capital and therefore not subject to tax deduction. More explained here.
Interest attracts the largest deduction … Read the rest