It's never too early to start prepping for tax season. For real estate investors, filing taxes can be a complicated and frustrating process, so the sooner you get started, the better off you’ll be. Get your financial house in order and take advantage of every tax benefit, break, and exemption you can!

Tax advantages are one of the greatest incentives we have as real estate investors. This is especially true of buy-and-hold investors, who benefit from the government’s encouragement of long-term investing.

Tax incentives are a big reason to become a real estate investor. From a multitude of potential deductions for rental property owners, depreciation, pass-through income, and utilizing capital gains taxes instead of income taxes. 

If you’re at all familiar with real estate investing, you know that one of the biggest advantages that proponents of real estate investment laud are tax benefits. This benefit, however, can sound vague to anyone who isn’t familiar with tax law or doesn’t handle their own taxes—and let’s be honest, most of us don’t!

Investing in real estate is a straightforward venture...in theory. Buy a property, rent out the property, make money off of the rent. Simple, right? Unfortunately, theory isn’t reality. We have to deal with things like market climates, taxes, insurance, property management, tenant screenings, turnover, and all sorts of unforeseen complications.

One of the most daunting things for anyone of any age, real estate investor or not? Taxes.

For us, there are some unique tax advantages that we can use to leverage real value. We aren’t talking about creative tweaking that bends the rules to create write-offs. We’re talking basic principles in real estate investment that can minimize how much you pay in taxes each year, thus maximizing your passive income.

Some of these are relevant for your annual taxes, while other will be relevant year-round and for your investment strategies and decisions!