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Real Estate Professional: What You Need to Know About Taxes

If you’re a real estate professional, taxes can be your best friend or your worst nightmare. The good news? The IRS offers some major tax benefits—if you qualify. The bad news? Well, the tax code can feel like it was written in another language. That’s where we come in. Let’s break it down in plain English.

Real Estate Professional

1. What Is Real Estate Professional Tax Status?

Not everyone in the industry qualifies for real estate professional tax status—but if you do, you unlock major tax benefits.

To qualify, you must:

✔ Spend more than 50% of your working time in real estate activities.
✔ Log at least 750 hours per year in real estate-related work.

Why does this matter? Because with real estate professional tax status, you can deduct rental losses against ordinary income, reducing your tax bill significantly.

real estate professional tax status

2. Real Estate Professional Tax Benefits: Why It’s a Game-Changer

Qualifying for real estate professional tax status allows you to:

💰 Deduct rental losses without the usual $25,000 limit.
🏡 Depreciate properties faster, reducing taxable income.
📉 Offset real estate losses against your salary or business income.

Without this status, real estate losses are considered “passive” and are limited. But with it? You could save thousands in taxes.

3. Real Estate CPA vs. Real Estate Accountant: Who Do You Need?

When it comes to taxes, who should you hire, a real estate CPA or a real estate accountant?

  • A real estate CPA specializes in tax strategies and helps you qualify for real estate professional tax status legally.
  • A real estate accountant focuses on bookkeeping, ensuring your finances are in order.

If saving on taxes is your goal, a real estate CPA is the way to go.

cpa back taxes

4. What Should a Real Estate Professional Do Regarding Property Taxes?

Property taxes can be a hidden drain on your profits. Here’s what you should do:

  • Check your property tax assessment—you might be overpaying.
  • Claim deductions that apply to real estate professionals.
  • Plan ahead for property tax increases to avoid surprises.

A real estate CPA can help ensure you’re not paying more than necessary.

JC Castle Accounting specializes in tax strategies for real estate professionals, helping you navigate real estate professional tax status and reduce your tax burden. Schedule a consultation today and keep more of what you earn.

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5. How to Maintain Real Estate Professional Tax Status and Maximize Savings

Securing real estate professional tax status is one thing—keeping it is another. The IRS closely watches claims, so stay compliant by following these key steps:

  • Log your hours – Keep a detailed record of your real estate activities.
  • Separate your income – Make sure your real estate work is distinct from any W-2 job.
  • Work with a real estate CPA – Get expert guidance to protect your tax status.

Without proper documentation, you could lose your real estate professional tax benefits and pay more than you should. JC Castle Accounting helps real estate professionals qualify for tax status, maximize deductions, and stay IRS-compliant. Let’s talk—because smart investors don’t overpay taxes.

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ALL-IN-ONE
SOLUTIONS

Beyond bookkeeping, we offer a full suite of financial services From payroll to tax reduction, we’ve got you covered every step of the way.

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We Simplify your bookkeeping with our seamless integration of cutting-edge software and personalized expertise. Let us streamline your operations while you focus on growing your business.

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PRICING

You will get top-notch financial management without breaking the bank. With transparent and competitive pricing, we make sure you get the best value for your money.

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