Buying and renting property is one of the fastest growing trends that people use to build wealth and those who successfully employ this strategy can create a better lifestyle. But part of being an effective real estate investor is knowing how to reduce taxes on rental income. The goal is to minimize taxes so that there is more money to reinvest at the end of the day. Here are three tips for reporting income from rental real estate on a tax return.Rental Income
One of the benefits of owning real estate is the income that landlords generate from rent. The payments increase taxable income so owners must keep an accurate record of rents and report the amounts for each property separately. The tax treatment for rental property depends on whether it is passive income, generated by a company that is in the business of renting personal property, and if the owner used the property at any time during the tax year for personal purposes. Each of these factors will impact taxes differently so be sure to have a good knowledge of the rules that apply.Rental Expenses
The costs of owning the rental property are allowable deductions. Owners can realize significant tax savings with good record-keeping and knowledge of tax guidelines. Three key rental expenses include:
Mortgage Interest. If there is a loan on the property the lender will send a Form 1098 at year-end. This is the statement that shows the amount for mortgage interest, deductible points, and property taxes paid through an escrow account.
Property Taxes. There are instances when property taxes will not be included on a Form 1098. For instance, the cash purchase of an investment property excludes the existence of a mortgage. In those instances, no escrow will be established. Instead, the property taxes will be paid directly by the owner. Refer to the property tax bill and payment receipts for amounts paid during the year. This will be key to reporting the deduction on the tax return. Additionally, investors should be careful to remove from their books any property that they sell or transfer during the year. Exclude those properties from tax returns in future years.
Other Deductions. By claiming property, investors can often lower taxable income with deductions such as depreciation, insurance, and maintenance costs.
These are just a few of the items that owners of rental property should track. To learn more about reporting rental income and expenses visit http://www.tbsusa.com for a free tax organizer that will help maximize allowable deductions for greater tax savings.
Deductions for Rental Property – Properly Claiming Tax Deductions
Technology in Education
Technology has moved at a fast pace over the last decade. Wouldn’t you agree? As a result, many technologies have replaced the need for human resources in some fields, and it has also impacted education drastically.Before delving into the impacts of technology on education however, consider:· How travel agents have been largely replaced by online reservation systems.· In 1901, Charles Holland Duel stated that “Everything that can be invented has been invented”. This was over one century ago, where numerous inventions had yet to be patented and trademarked.· The number one focus on this list of technological impacts, is how computers and the internet has affected lifestyles and education. Everything can be shared in an instant, and snail mail is no longer the main method of communication. In the past one had to wait a few days before receiving a message, unless a phone or fax were used.In the 21st century, educational institutions have moved with the times by integrating technology into learning. After all, our educational systems are a critical part of societal norms.Here are some of the key ways that technology has broadened teaching horizons:Traditional colleges have adopted online methods of learning, which is otherwise known as online colleges. No longer do students have to relocate from thousands of miles away to get a quality education. All that’s needed is a computer and connection to the internet to plug into online learning.This has opened up numerous doors for working adults who have previously been restricted by time and resources. The technology of online videos or recorded tutorials allows students to study on their own time, whether day or night.A study by US News purports that nearly 6.1 million students were enrolled in online college course in 2011. This number is expected to grow as the stigma of online certification has somewhat been lifted due to its increasing popularity in the workplace.Other ways that technology affects education include the student’s ability to research faster than ever, compared to pouring over books in the library. As an example, a study by the Pew Research Center suggests that digital technologies have helped students to become more self-sufficient researchers.Educators too have integrated technology into learning, with the distribution of course material and online video, voice, or written tutorials for student references.Finally, there has also been a dynamic shift in the communication between students and teachers via online, social and digital mediums.
The Small Community of Hutto, Texas
Hutto, Texas is a small community located seven miles east of Round Rock and northeast of Austin, Texas. The current population of Hutto is estimated at around 17k residents, and Hutto has been a very fast-growing city since the construction of State Highway 130, also called the Trans-Texas Corridor.
In the census of 2000, the population of Hutto was just over thousand people, but the recently built toll road has dramatically increased the population and the city is expected to continue expanding in the next few decades, as the highway nears completion.
Hutto was founded in the year 1876 when the International Great Northern Railroad passed through land owned by James Emory Hutto, for whom the city is named. Shortly thereafter, James Hutto sold fifty acres of local land to the New York Land Company for a town site. At the time, Hutto was a wealthy Williamson County landowner and cattleman, but a few years later, he relocated to Waco and entered the hardware business. At roughly the same time, numerous Swedish and German immigrants traveled to the area to begin new lives in the ranching and farming industries, which were becoming very successful in the Hutto area.
In 1915, a circus train stopped in at the Hutto train station and a hippopotamus escaped to nearby Cottonwood Creek, where it caused a commotion as local residents and railroad as well as circus employees tried to recapture the Hippo. The story caused a local legend to emerge, and eventually the Hippo became the mascot for the Hutto High School and its sports teams, as well as various other local businesses.
There are many activities in Hutto for the sports enthusiast as well as the gourmet diner, and some of the popular restaurants in Hutto include Mario’s Mexican Restaurant and El Poblanito’s, another Tex-Mex eatery. If the diner prefers a national chain, Chili’s is sure to please, and there is a popular barbecue joint called Fat Thompson’s as well.As for sports, the aptly named Hippo Stadium is home for the local Bulldogs, and there are many other sports-related facilities as well. The Hutto real estate market is also extremely affordable. It offers a much cheaper alternative than the nearby Pflugerville and Austin real estate markets.
Hutto also has a family-owned general store called Common Spirits which offers a variety of spirits and tobacco products, as well as basic amenities and grocery items at a reasonable price. The store is located on Front Street, and is a local favorite. As the city grows, there are more and more national brand stores and restaurants, but there is still plenty of local charm and family owned venues as well.
The new state toll road is expected to eventually spur the population growth to over 30k residents by 2010. The new toll road is the biggest transportation project currently underway in the entire United States, and the toll road connects the area to metropolitan Austin, and to other major thoroughfares leading to San Antonio and Houston, as well as nearby communities such as Pflugerville and Bastrop, as well as Bryan and college Station to the north.
One of the largest employers in the Hutto area is the T. Don Hutto Correctional Facility in nearby Taylor, Texas, which is just a few miles east of Hutto itself, and a family detention center that houses immigrants and their families. Hutto is also very well represented in the technology industry, with Agisca Technologies as well as Cypress Semiconductor, both of which are situated in or around Hutto.
Hutto is a very centrally located community, with access to many metropolitan areas, but a small town atmosphere and scenic rolling hillsides with parks, rivers and access to many local lakes and rivers.