Maximizing Tax Breaks Through Smart Real Estate Moves

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Maximizing Tax Breaks Through Smart Real Estate Moves

Tax time is coming. For some this is a stressful time when more money flows out of their pockets. For others it is a great time of year, where they separate themselves and their wealth from the rest by maximizing their tax savings. What smart money and real estate moves can more individuals make to legally keep the tax man out of their pockets, and boost their net incomes?

Challenge Property Taxes

One of the most common ways that individuals end up giving away more than their share to tax authorities. In some areas annual property tax bills are overinflated for almost half of all homeowners, every year. It’s a way for authorities to borrow extra billions from the public, interest free, and repay only a portion to those that actually make the effort to ask for the breaks they deserve. Florida homeowners may also be entitled to a number of other annual breaks via paying bills early, and claiming their homestead exemption.

Business Tax Breaks

Real estate investors in particular often neglect many potential tax breaks and literally give millions more to the IRS than they need to. Serious real estate investors use LLCs for liability and privacy protection. Having a business entity in place can also provide a variety of extra tax breaks that help investors keep more of their earnings.

Upgrade Your Housing

Buying a home, upgrading to a larger home, or refinancing and improving an existing property can offer breaks to the average individual, such as via the Mortgage Interest Deduction. However, as with all items on this list make sure you talk to your tax professional first, before making any changes, and be clear on how much you can really save, or not.

1031 Exchanges

Investors that are selling and trading investment properties in 2016 can also defer taxes on their gains by using the protection of 1031 exchanges. Just make sure you plan this well in advance. Ask your FL title company for their help, or if they can refer to a real estate attorney or exchange service provide who can help facilitate the transaction.

Real Estate IRAs

With the stock market looking scary in 2016 many more individuals may want to convert their 401ks, IRAs, and stock portfolios to real estate investments. By doing this through a self-directed IRA individuals can enjoy tax deferred and even tax free returns.


If you are going to give to charity this year make sure you keep receipts and a log of any associated expenses so that you can fully deduct donations (money or property) on your tax returns.

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