Standard deduction or itemized deduction for military with rental property?

Great question about your tax situation! With your new duplex, things definitely get more complicated than when you just had W-2 income. The decision between standard and itemized deductions depends on which gives you the larger deduction. For 2025, the standard deduction for a single person is expected to be around $14,000. You'd only want to itemize if your total itemized deductions exceed that amount. For your rental property, that's actually handled separately on Schedule E, not through itemized deductions. You'll report rental income and can deduct expenses related to the rental portion (repairs, insurance, mortgage interest for that unit, etc.). These rental deductions aren't affected by whether you take standard or itemized deductions for your personal taxes. Regarding sales tax - if you itemize, you can either deduct state income tax paid (which doesn't apply to you as an Alaska resident) OR sales tax paid, whichever is higher. For sales tax, you can either use the IRS tables based on income or add up actual sales tax paid (just the tax portion, not the entire purchase). But remember, this only matters if you're itemizing.

I was in almost the exact same situation a couple years ago! When I first started dealing with rental property taxes, I spent hours trying to figure everything out and still made mistakes. I finally tried this AI tax assistant at https://taxr.ai that completely turned things around for me. I just uploaded my documents and it identified all the deductions I could take for both my personal side and rental side of my duplex. It even flagged that I could depreciate the rental portion of my property (which saves me thousands each year) and helped me understand exactly what expenses to track for each side. The best part was that it explained everything in simple terms and told me exactly what forms I needed. Saved me a ton of time and definitely got me a bigger refund than I would've figured out on my own!

Just wanted to update after trying taxr.ai that was mentioned earlier. I'm honestly impressed! It immediately recognized my military status and asked all the right questions about my state of legal residence vs. where I'm stationed. It helped me figure out that I should actually take the standard deduction this year, but showed me what I need to track so I can potentially itemize next year. The military-specific guidance was spot on - it even helped me properly allocate my VA mortgage interest between the rental and personal portions of my property. I was able to handle the whole tax situation myself in about 45 minutes when I spent almost a full weekend on it last year. Definitely recommend for any military members with investment properties!

For what it's worth, I spent THREE DAYS trying to get through to someone at the IRS last year with questions about my rental property taxes. Absolutely frustrating experience. I ended up discovering this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in less than 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to handle my situation with living in one unit and renting the other. Turns out I had been filing incorrectly for 2 years! She explained that I needed to allocate my mortgage interest and property taxes proportionally between Schedule A (for my personal unit, if itemizing) and Schedule E (for the rental unit). Saved me from a potential audit headache.

I need to eat my words from earlier. After trying to call the IRS for TWO WEEKS with no success (kept getting disconnected), I broke down and tried that Claimyr service. Not gonna lie, I was 100% sure it was a scam. I'm still shocked that it actually worked. Got a call back in about 25 minutes and was connected directly to an IRS agent who specialized in property matters. She spent almost 45 minutes walking me through exactly how to handle my situation with my rental property. The advice about allocating expenses between the personal and rental portions was super helpful. Also found out I could claim a home office deduction for the part of my personal unit that I use exclusively for managing the rental property. That alone will save me more than the service cost!

Military member here who's owned multiple rental properties. Quick tip: Track EVERYTHING expense-wise related to the rental side, including: - Mortgage interest (proportional) - Property taxes (proportional) - Insurance - Maintenance/repairs - Utilities if you pay any for tenant - Travel expenses to check on property - Advertising costs - Property management fees if applicable Most importantly, don't forget depreciation on the rental portion - it's a huge deduction many miss. And remember you'll need to provide your tenant with a 1099 if you paid any service providers more than $600 in a year for work on the rental. Also, consider tracking car mileage when you do anything related to the rental - trips to hardware store for repair supplies, etc.

I'd recommend keeping your personal and rental expenses COMPLETELY separate if possible. Different credit cards, different bank accounts, etc. Made the mistake of mixing them my first year and spent like 20+ hours at tax time trying to figure out what was what. Also, don't forget you can deduct any fees you pay for tax preparation related to your rental income! I paid $350 last year for a CPA to handle my taxes with rental property and was able to deduct that on this year's return.