When running a small business, rental property can be a great investment if you manage it correctly.

Renting out the property you own gives you a steady stream of income, and all you have to do is ensure that the property is maintained and the tenants pay their rent on time.

Of course, you’ll also need to make sure that you don’t end up paying any more in taxes than you need to. If you play your cards right, taxes don’t have to be difficult and overly expensive.

Take a look at some end-of-the-year tax strategies that can make tax time easier on you and your small business.

Use Tax Tools to Make Things Easier

As pointed out in the article “5 Year-End Tax Strategies for Your Rental Property Management Business,” tax software can make your job much easier when it’s time to file your taxes.

Take the time to find software that can file scanned receipts as well as digital ones – this will make sorting and organizing your paper receipts much easier.

A good property management software system will also allow you to store and track invoices in the cloud and send out overdue notices automatically.

You will want to be certain that you have all of the payments that you’re owed in your accounts by the end of the year so that you can figure your profits and losses accurately on your tax forms.

Don’t Forget Your Deductions

When it’s time to calculate your tax burden for the year, you’ll want to be sure that you haven’t missed any of the deductions you can take.

Any money that you spend on repairing and upgrading your property can be viewed as an investment and used as a deduction on your taxes.

Be sure to understand the difference between a repair and an improvement.

Repairs are meant to maintain your property in its current good condition and are counted as straight deductions.

Improvements, on the other hand, increase the value of your property and must be depreciated over the useful life of the improvement.

You’ll also want to take into account the depreciation on your rental properties. That’s considered a business expense. Insurance, travel expenses, theft, and damage can also all be counted as deductions.

A property management software program can track these deductions and ensure that you’re claiming the proper amount each year and that you don’t leave anything out.

Make Year-End Investments

If you haven’t put much money into your property yet this year, you still have time to do so and count it as a deduction.

The end of the year is the time to pay all of your vendors, invest in new office equipment, and fix nagging problems with the building that have been put off for too long. Don’t forget to winterize your building as well.

While you’re at it, make sure to delay the receipt of any payments for the next year until Jan. 1. This will reduce your rental business’s taxable income and ensure that you can take the maximum amount of deductions available to you.

Rental income taxes can be complex, so be sure to consult a tax professional before submitting your completed return to the IRS.

About the Author: Cheryl Baer is a freelance writer who writes about business and property management.