By Michael Monteiro, CEO of Buildium

It’s that time of year again: tax season. As a business owner myself, I know how complicated navigating the various tax deductions and credits can be. So I asked my team to help me pull together this guide to the ten most common tax deductions for property managers. It includes examples unique to the Real Estate industry, along with helpful tips and tricks to save property managers the most money when filing this year. Because no one wants to leave money on the table.

Before we dive in, know that this guide is not a substitute for a tax professional, and likely does not answer every conceivable tax question you may have. If you have more questions, you should seek assistance from a competent tax professional—a CPA or enrolled agent familiar with business taxes.

1.                  Car Deductions

Do you drive between different rental properties as part of your day-to-day responsibilities? Do you use your own car as transportation when you need to meet with tenants, repair people, real estate brokers, or even your banker or attorney? If so, you’re eligible to deduct the cost of driving, one of the most popular tax deductions for property managers. With the exception of commuting to and from your home to work, the cost of using your car on the job is deductible when you’re a business owner. Hopefully you’ve tracked all your expenses (gas, oil, repairs, car washes, etc.) to help you easily figure out your annual deduction. But if you didn’t, you can still take the standard mileage rate, which only requires you to know how many miles you drove for business. In 2015, the standard mileage rate is 57.5 cents per mile.

2.                  Office Expenses

Whether you run your property management business from your home or have a separate office, you are eligible to deduct office expenses. If your office is outside of your home, you can deduct the rent and utilities in full.

If you work out of a home office, which by the IRS’s definition means a space that you use exclusively for business, you may deduct the cost of your home office. The amount will be calculated based on the percentage of your home you use for your office. There’s a standard rate that can apply here as well: take $5 for every square foot of your home office (up to 300 feet). Even if you rent your home, you can still deduct a portion of your monthly rent – often a sizable amount.

3.                  Business Travel

Perhaps you traveled to property management or real estate conferences, like the NARPM Annual Convention, in 2015. Did you know that you can deduct your airfare, local transportation and lodging expenses from those trips? Even the meals you purchased while on the road for business are 50 percent deductible, so make sure you track expenses carefully.

4.                  Advertising & Marketing

Any expenses related to advertising and marketing your property management business are deductible. Perhaps you took out an ad in the local newspaper or a real estate publication, or printed brochures to explain your services to prospective customers. Even signage you’ve purchased for your business is deductible under this category.

You can also deduct money spent on digital marketing efforts. That could include fees to be a member of an online property management network like All Property Management, or the costs of developing and maintaining a property management website. For example, hosting fees, maintenance and updates, as well as money you spend driving traffic to your site, like paid Google search campaigns, are all deductible.

5.                  Property Management Software

If you purchased software off-the-shelf to use for your business, did you know that you can deduct the full cost? And today, many property managers are also using subscription cloud-based software, like Buildium, to handle everything from rental applications to tenant screening, lease management and maintenance appointment tracking. If you use a subscription software, you can deduct your entire monthly fee. 

6.                  Equipment & Tool Rentals

Another of the most common tax deductions for property managers is the cost to rent equipment and tools. Maybe you didn’t purchase a vehicle for your business in 2015, but leased one instead: you can still deduct your actual expenses, like monthly lease payments and gas, or deduct mileage according to the standard mileage rate. Just be aware that you must stick with the method you choose for the entire term of your lease – you can’t take the standard deduction for 2015, then turn around deduct actual expenses for 2016.

Some other examples of items you might rent for your property management business include office furniture and equipment needed to complete specific repairs at the properties you manage. Remember the costly industrial carpet cleaner you rented last year? Count it as a deduction.

7.                  Materials & Supplies

From pet waste stations to maintenance signage, and even printed passes handed out to tenants’ guests granting them access to the building, there are a lot tax deductions for property managers when it comes to supplies. The supplies required to run a successful property management business can add up quickly, but the good news is that these items are all deductible if you use them up in less than one year.

You can also deduct common office supplies, like pens, paper, notebooks and postage stamps. Any personal property you buy for your business that costs less than $200 is also deductible as materials and supplies the year they are used or consumed. That includes parts – such as a new sink faucet or LED light bulbs – used for property repairs.

8.                  Legal & Professional Services

Many property management businesses contract attorneys, accountants, consultants or other professionals, making the fees for legal and professional services another of the most common tax deductions for property managers.

9.                  Insurance

From employer liability to business interruption and general liability, property management businesses require a good deal of insurance to protect themselves from things like wrongful eviction and tenant discrimination cases. Fortunately, the insurance you buy just for your business is deductible. If you have a home office, you can also deduct a portion of your homeowners insurance, and if you’re self-employed you can even write off 100 percent of your health insurance premiums from your income tax.

10.  Employees & Independent Contractors

Many property managers hire full time repair people, while others choose to hire contractors. If you hire one or more employees, you can deduct their payroll and associated costs, like benefits, in full. The cost of hiring contractors is also deductible in full, whether that’s a custodian or a bookkeeper.

Now that you know the most important tax deductions for property managers, it’s time to get to work on filing: the April 15 tax deadline is just around the corner.

Michael Monteiro is the CEO of Buildium, the only property management solution that helps real estate professionals win new business from property owners and community associations seeking services.