Optimizing your rental property tax deductions can boost your bottom line each year. Yet many landlords overlook eligible write-offs, leaving money on the table. Use this rental property tax deductions checklist to claim ten commonly forgotten expenses, so you keep more of your rental income.
By tracking these costs now and keeping thorough records, you’ll maximize your allowable deductions on Schedule E and related forms. Dive into each deduction below and learn what qualifies, how to document it, and best practices for year-end filing.
Mortgage interest is often the largest deduction you’ll claim on a rental property. When you pay interest on loans used to acquire or improve your units, you reduce your taxable rental income dollar for dollar.
This expense is fully deductible, and you should keep Form 1098 statements and year-end amortization details for each loan (Rentastic).
Certain closing costs, like points or loan origination fees, can’t be deducted all at once. Instead, you amortize these intangible costs over the life of the loan.
Under IRS rules, you spread these costs over your loan’s term, reducing taxable income incrementally (Rentastic).
Whether you hire a local agent or a full-service management company, fees paid for professional rental oversight are deductible.
Track monthly statements and annual summaries to capture the total paid to third-party managers (Rentastic).
If you cover utilities or insurance for tenants, those outlays count as operating expenses.
Track these expenses monthly and attach annual summaries to your records. Report them on Schedule E, lines 9 and 10 respectively (Rentastic).
Depreciation lets you deduct the cost of the building (not land) over its useful life, lowering taxable income without affecting cash flow.
By classifying components (carpets, appliances, landscaping) into shorter lives (5, 7 or 15 years), you accelerate deductions in early years (Rentastic).
Record depreciation on Form 4562, completing Part III for residential rental property.
Routine upkeep keeps your units habitable and qualifies as a current expense fully deductible in the year incurred.
Categorize all repair invoices carefully, and report totals on Schedule E, line 14.
Major upgrades increase your property’s value and lifespan but must be depreciated over the IRS recovery period.
Keep detailed records of cost, installation date and useful life for each improvement.
Tracking income and expenses with specialized tools can qualify as a deductible business expense.
Link bank accounts, auto-categorize transactions, and generate profit-and-loss statements in real time (Rentastic).
Log each subscription as “software expense” and report on Schedule E, line 18.
Travel related to property management or inspections can be deducted either by actual costs or the standard mileage rate.
Attracting tenants often requires spending on promotions, all of which you can deduct in the year incurred.
Group these under “advertising” in your ledger and include totals on Schedule E, line 16.
Choose one deduction category to review this week. Update your records, save the right documents, and integrate these line items into your year-end filing process. With consistent tracking, you’ll never miss another rental property write-off.
© 2025 Rentastic
Rentastic is registered as a trademark. Terms and conditions, features, support, pricing, and service options subject to change without notice.
Comments