Part 3 – Don’t Fear Rental Income
So many small businesses fixate on the almighty write off; sometimes even attempting to hind income such as rental income, in an effort to pay less tax. As mentioned in previous blogs, it is good practice to not pay more than required. But there are two important reasons why hiding rental income is a MISTAKE.
First of all it’s always important to be authentic to yourself and your business, and this includes your financial house. Hiding income is risky and could land you and your business in some hot water over a perceived small gain. On top of being risky, the fact is, if you have the right knowledge and skills, declaring your rental income could be to your financial advantage.
Did you know if you are gaining rental income then you are incurring costs to house that tenant. Since you are incurring the cost, you can write off mortgage expenses, utilities, maintenance, repair and even the costs to furnish the room. In addition, items like stoves, fridges and laundry machines are all capital costs!
Most of the time and using legitimate write offs properly, your rental may cost you more than you declare in income! Amanda has the experience and knowledge to get your taxes filed in the best and most authentic way possible.