Property to spare…Owning rental properties can be a great source of income. Rental properties can also be a black hole that sucks all your money into it. How can you maintain your rental properties when you have an IRS tax debt however? You’re already struggling to keep the properties occupied, to keep up with repairs and general maintenance, and of course to make sure your tenants are paying their rent.What can you get? Before we get into the trouble that can be caused to your little enterprise by an IRS tax debt let’s see what, if any, tax deductions or credits you can get. You have the obvious taxes that you have to pay such as property tax. If you still owe on the mortgage for the property you can deduct the interest accrued on the mortgage loan for that year.You have to report any rental payments as income on your taxes. However the security deposit for the rental agreement doesn’t have to be counted as income. The plus side is that you can deduct any expenses related to the property on your taxes.Deductible expenses include: depreciation on the property, repairs and improvements, and anything else that is required for the maintenance of the property. Heck your expenses can be more than your rental income.Now let’s get to the meat of things. What happens when an IRS tax debt is added to your life?Act immediately! The main thing is to do is take care of the tax debt with the IRS as soon as you can. Waiting for the IRS to take the first step will be disastrous. In fact as a former IRS-Hitman let me tell you what happens if you let the IRS take control of your debt for you.The IRS can levy your bank account. That means they can withdraw the money you owe, or as much as they can get.The IRS will garnish your rent income, cutting you off from your major source of money. And without income or access to your bank account there’s no way for you to maintain your properties and you could lose your renters.Imagine not being able to replace a broken air conditioner, or pay the landscaper.The IRS can also put a lien on your property making it practically impossible to use the property to refinance or get any kind of loan to pay off your IRS debt.Don’t panic… I know it can be hard to be a landlord and you have enough laws revolving around that to worry about. But an IRS tax debt can cause you to lose everything! Take action as soon as you know you have an IRS tax debt and the only thing you’ll have to worry about is your tenants.Now you have the smoking gun…Use it!
- 5 Travel Tips for Easier and Enjoyable Travel
- Local Google Advertising For Small Businesses
- The Fed moves up its timeline for rate hikes as inflation rises
- Bitcoin plunges 30% to $30,000 at one point in wild session, recovers somewhat to $38,000
- Here’s Why You Need to Charge Your Electric Vehicle At Home