Investing in REITs can have both advantages and disadvantages when it comes to taxes. REITs are required to pay no less than 90% of their taxable income to investors as dividends, leaving only a meager 10% which can be reinvested by new acquisitions or capital improvements. This means that any perceived growth is usually driven by price appreciation. Additionally, when it comes to taxes, investors should work with a tax professional to reduce their levels of stress and use some of the best strategies when it comes to taxes and their property. Wages paid to employees or independent contractors, as well as professional fees, are all tax deductible on Schedule E of the tax return.