Re: Cleaning - Landlord Forum thread 349484

Re: Cleaning by Stephen (WA - Washington State) on November 30, 2016 @17:15

Personally I see little reason to charge tenants for my time. The amount I receive from them for my labor is 100% taxable income for me. Yes, the tax rate is less than 100% so I would have a net income, but I don't see it as really worth the hassle especially the part about arguing with the tenant. Now, you can hire someone else to do the cleaning/repairs and pay them. The amount you pay them is 100% an expense you can claim (off-set by the amount of the deposit you withheld).

Examples:
Deposit was $500, you paid $300 for materials for repair and cleaning supplies and then figure $125 for your labor. You return $75 to the tenant. On your taxes you claim $300 for expenses (the amount you pay yourself is not an expense) and income of $425 (the amount you withheld from the tenant). That $125 difference is taxable income to you.

Deposit was $500, you paid $300 for materials for repair and cleaning supplies and then pay $125 to someone else to clean the house. You return $75 to the tenant. On your taxes you claim $425 for expenses ($300 materials plus $125 contracting a cleaner) and income of $425 (the amount you withheld from the tenant). It's a wash - no taxable income.

Deposit was $500, you paid $450 for materials for repair and cleaning supplies and then figure $125 for your labor. Your letter to the tenant says he's getting nothing back plus you want another $75. He never pays you. On your taxes you claim $450 for expenses (the amount you pay yourself is not an expense) and income of $500 (the amount withheld from the tenant). That $50 difference is taxable income to you.

Deposit was $500, you paid $450 for materials for repair and cleaning supplies and then pay $125 to someone to clean the house. Your letter to the tenant says he's getting nothing back plus you want another $75. He never pays you. On your taxes you claim $575 for expenses ($450 materials plus $125 contracting a cleaner) and income of $500 (the amount withheld from the tenant). That $75 difference is a loss to you and reduces your taxable income.

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Re: Cleaning by Monica on November 30, 2016 @21:10	[ Reply ]

Wow. Stephen. Thanks for taking the time. I copied your examples for future reference. I think I'll just hire someone.

Re: Cleaning by Monica (IL) on December 1, 2016 @09:09	[ Reply ]

Well, doesn't it seem that if a landlord has shallow pockets, that paying taxes would be cheaper than paying workers? I supposed your saying it is legal to pay myself, but if I went to court about deposit, will it hold up? Thanks.

Re: Cleaning by Anonymous on December 1, 2016 @15:39	[ Reply ]

Keep the cleaning fee's reasonable. And as far as going to court. You may win the case, the problem will be collecting from T. I do my own cleaning in most cases.