Now is the time of year to get with your accountant and find out if you have enough deductions from your real estate investments before the end of the year arrives and you can no longer take anymore deductions from your income.
By this time, most accountants will have the updated and newest tax laws on real estate or “passive income.” This is important for you, as the taxpayer, to stay on top of since you, the taxpayer is wholy responsible in the end.
We encourgage this visit to your accountant at this time of year because this is when they have the time to go over briefly your income and give you and idea of what you will be owing on April’s Income Taxes.
If you do everything correctly in real estate investing, you will soon be swamped with terrific income. But with more income, the more you pay taxes. The more taxes you pay, the faster you will lose income and eventually can find yourself working hard for nothing.
In fact, you will find that your biggest bill each year is your income taxes. For most middle class earners, they usually pay 40% on all their income. That is for every dollar earned, .40 cents of that dollar goes to Uncle Sam. That is nearly half of one’s income! That is why they now say that it will be June or July before you get to keep what you earned (taxes are always paid first with W2 earners).
The nice thing about real estate investing, you have many ways to shelter your income compared to a W2 wage earner. Thus, keeping more of your income legally.