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July Is When Smart Investors Start Thinking About Taxes
April is when you pay taxes. July is when you influence them.
Every year, investors scramble to reduce their tax bill sometime around March.
By then, it's usually too late.
Your CPA can help you prepare an accurate tax return, but there are only so many things they can do after the year is over. The best tax strategies happen before December 31, not after.
That's why I think July is the perfect time to take a deep breath and ask a few important questions.
Will I buy another property this year? Will I sell one? Am I planning a major renovation? Will I place a rental into service? Should I be thinking about a 1031 exchange? Would cost segregation make sense on one of my larger acquisitions? Those aren't questions to answer on New Year's Eve. They're questions to discuss with your CPA now, while you still have time to act.
One of the biggest mistakes investors make is treating taxes like an annual event. Taxes are simply another expense of doing business, and the best operators manage them the same way they manage financing, construction costs, and marketing. They plan ahead.
That doesn't mean chasing every deduction or buying something just to reduce your tax bill. Spending a dollar to save thirty cents is still a losing proposition.
It does mean understanding how your investment decisions affect your taxes.
For example, the timing of a sale may matter. The timing of a renovation may matter. Whether you place a property into service before year-end may matter. The way you structure a transaction may matter.
None of those decisions should be made in a vacuum. One of the best meetings I have each year isn't in April. It's sometime during the summer. That's when I sit down with my tax advisor and ask, "If everything goes according to plan for the rest of the year, what should I be thinking about today?"
Sometimes the answer is, "Nothing." Sometimes it's, "Don't sell that property until January." At lease once it was, "Let's start planning for a 1031 exchange." And sometimes it's, "Keep better records."
The point isn't that there's one magic strategy. The point is that you still have options. By April, you're mostly reporting history. In July, you're still writing it.
One final thought: I'm not giving tax advice here, and neither should anyone else unless they're qualified to do so. Every investor's situation is different. But I can confidently recommend this: don't wait until tax season to start thinking about taxes.
Your future self—and probably your CPA—will thank you.
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Over 4 million people have had the same lightbulb moment.
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The Quicker
Tax planning isn't something you do in April—it's something you do all year. July is a great time to meet with your CPA, review your investing plans, and make decisions while you still have options. By tax season, you're reporting history. Right now, you're still writing it.
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Considering a 1031 Exchange? This is essential reading…
Most real estate investors doing a 1031 exchange don't realize their Qualified Intermediary is earning interest on their money during the exchange period. Deferred does something almost no other QI does — they share that interest with you instead of keeping it. No fee to the investor. No catch. Just a smarter way to handle your next exchange. If you're selling an investment property and reinvesting the proceeds, this is worth a conversation before you sign with anyone else. Learn more here —> https://www.deferred.com/partner/rei-quick-tips
The IRS lets you depreciate a residential rental property over 27.5 years. What most investors don't know is that a cost segregation study can reclassify significant portions of that property — flooring, fixtures, landscaping, HVAC components — into 5, 7, or 15-year schedules instead. The result is a much larger deduction today, which means more cash flow now. KBKG has unlocked over $11 billion in tax savings since 1999. Their self-service Cost Seg Pro tool starts at $495 for qualifying properties — and includes audit support. Run their free savings calculator before you decide.
Resources
Vetted tools and resources for real estate professionals. We only list what we'd use ourselves. Browse the full library here.
💼 KBKG Cost Segregation — Accelerate your depreciation deductions with a cost segregation study from one of the most respected firms in the business. Best for investors who have acquired or improved commercial or residential rental property and want to front-load their tax savings. Get a Free Feasibility Analysis
💼 MVO CPAs — Cost segregation studies that accelerate your depreciation and cut your tax bill. 100% IRS acceptance rate. Get a Quote
🔄 Deferred — The only 1031 exchange intermediary that charges no fee to the investor. Keep more of your money working in the exchange. Schedule A Call
🧾 Keeper Tax — Automatically finds and tracks your business deductions year-round, then files your taxes when you're ready. Best for self-employed investors, agents, and 1099 earners who are probably leaving deductions on the table every year. Start Saving
