Whether or not owning rental property can help you at tax time depends on several variables.  The largest variable is whether you are paying a mortgage on the rental property or if you own it free and clear.  To get any tax credits on your rental property, you must itemize your tax deductions.

Remember that any money coming in to you via the rental property is income.  If your tenant improves the property in any way and does not charge you for it, this is income.  If you have retained a security deposit and it is not returned, it is income just like the rental fee.

The Internal Revenue Service is very precise about income from property rental.  For this reason, landlords should keep thorough records of all income and expenses pertaining to their rental properties.

Rental properties are considered to be tax-deductible by the Internal Revenue Service.  So, all expenses related to your property are, potentially, tax deductions.  If, however, you claim deductions that exceed the income from your rental properties, you are likely to find these deductions will be denied.  Otherwise, all expenses related to maintenance, repair, heating costs, cooling costs, and even administrative expenses are tax deductible on your income tax return.  If you have a dedicated vehicle used to haul and transport from one property to another, the gasoline, maintenance, and repair bills of this vehicle might qualify for tax deductions.

You can even obtain a home equity line of credit against your rental property and put that money in non-taxable investments.

Remember that when you own a rental property, you are in business.  As with any business, property rental has its pros and cons when it comes to tax liability.  You want to be certain that, as a businessperson, you take advantage of all of the tax credits, exemptions, and deductions to which you are entitled.  You also want to be clear on all the restrictions, liabilities, fees, and penalties you could face at the hands of the Internal Revenue Service should something go wrong.

Any person embarking on a business venture should talk to a financial consultant and/or tax expert.  Financial consultants and tax experts are accredited and trained to know every aspect of investment strategy and law as it applies to your taxes.  You can even find tax specialists and financial consultants who specifically operate in the niche of income properties.  Having a professional guide you is the best way to be certain that you will be successful and able to avail yourself of every tax credit to which you are legitimately entitled.