One of the less pleasing challenges is estimating how much money to put aside for the taxes. This is especially true for investors who do not have good accounting practices or follow an advanced tax plan. Without adequate planning, you could wind up having to put aside half or more of your earnings. However, there are simple tax shelters that will lower this burden starting with contributing to your retirement savings, charitable donations, and even spending much of the year outside the US to gain tax benefits.
There are few things as burdensome as having the IRS place tax liens and even seizing your bank accounts for overdue taxes so paying these burdens off should be your top priority. Fortunately, there are payment plans that you can set up with the IRS which will get them off your back while paying in reasonable amounts.
This is one of the real estate tax challenges that can actually be easy to remedy. You may have noticed that the very wealthy seem to pay far less in taxes and yet do so while following all the rules and regulations. In many cases, setting up an LLC and having a really good accountant will have you paying far less in taxes.
When money switches hands in real estate, you can trust that the IRS will be there for their share of the money. However, there are certain tax codes that will help you reduce your tax liability when switching or selling investment properties. By using self-directed IRAs or the 1031 exchanges, you may be able to put off or even eliminate much of the tax burden. Be sure to keep very good records, QuickBooks or a similar accounting software is a must for keeping records straight.
Maintaining payments on high property taxes can be quite burdensome and represent one of the most prominent real estate tax challenges. First, be sure to look for any exemptions and tax breaks that can really save you money. Second, many tax authorities use outdated information when sending out their tax requirements, so if something has reduced the value of the property over time, be sure to have it re-assessed so that it reflects the right property value. It is a good idea to appeal your taxes on all of your rental properties every three years.
By following these tips, you can greatly reduce your real estate tax challenges and put more money in your pocket.
Enter your email address below to join our newsletter
Privacy Policy: We hate SPAM and promise to keep your email safe.
Your email address will not be published. Required fields are marked *
Comment
Name *
Email *
Website
