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Am renting my house...


stuphel

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I'm renting my house out for the summer season ( 5 months) at $650 per month.

I want to do the right thing and pay taxes, but the info I've been given by our property manager isn't helpful. Can anyone explain to me

a) can I pay at the end of the calendar year for the total rent I've accumulated? In this way, I can deal with the situation once I get back to Lakeside in the fall. My property manager says that their accountant needs to have the tax paid monthly, and has to report it quarterly.

B) I've been given two options, pay a monthly tax of $520 pesos, which will not allow me to make any deductions for improvements to the property, or pay a monthly tax of $2800, from which I can make deductions for large improvements to the property. (It is my intention to spend the rent money on household improvements.)

c) Do I need a tax accountant to do this for me? The accountant will charge $400 pesos per month for submitting the paperwork and taxes to the government.

Any informed advice would be helpful. I apparently need to go to the SAT office on Monday if I intend to use this accountant. Apparently the office is closed from Tuesday on for Semana Santa.

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Be careful with tax accountants. A friend with a small jewelry hobby hired an accountant and got a tax ID. Accountant kept all tax payments and friend had problems with the Hacienda (tax authority). I don't know how to find a good accountant - only to be careful in using one unless you get really good recommendations from people you know.

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My neighbor is moving north and had planned on renting his Mirasol home. He said the real estate company told him the new tax on rentals is 35%. He now plans on selling his home as he feels the new tax will remove any profits after he pays expenses and upkeep.

Is he right? Is there now a 35% tax on renting your home?

If that is so and people start selling their home(s) instead of renting - I would think our real estate market will once again be flooded. Just a thought and a question.

Musicdoc

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No I have not heard that the tax is 35%. He may be confusing that with a standard deduction. You can take 35% off of the total rent collected therefore only 65% will be subject to tax, or you can pay tax on the entire amount if you are planning on taking deductions each month. Either way you choose, you must choose only one choice per year.

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