Rental property tax deductions: the complete checklist

Free tool: Schedule E expense organizer → Sort a year of rental income and expenses into the exact Schedule E lines. Print or download for your accountant.

Most first-year landlords leave money on the table — usually depreciation, travel, and the small costs that never feel worth a receipt. Here's the checklist, grouped the way you'll actually find the paperwork.

From your mortgage and tax bills

• Mortgage interest on the rental (from Form 1098) — the interest only, not principal.
• Property tax for the rental.
• Points on a loan for the rental — generally deducted over the life of the loan, not all at once.

Insurance

• Landlord (dwelling) policy premiums.
• Flood, umbrella, or other policies covering the rental.

Keeping it running

• Repairs and maintenance — fixing what breaks: plumbing, appliance repairs, patching, painting between tenants.
• Cleaning and turnover costs.
• Lawn care, pest control, snow removal.
• Supplies — filters, bulbs, smoke-alarm batteries, cleaning supplies.
• Utilities you pay rather than the tenant.
• HOA dues for the rental.

Running the business

• Advertising — listing fees, signs, photography.
• Tenant screening costs you pay (if not charged to the applicant).
• Legal and professional fees — tax preparation for the rental, attorney's fees for leases or evictions.
• Property management fees and rental software.
• Bank fees on the rental's account.
• Travel for rental business — mileage to collect rent, meet a contractor, or show the home. Keep a log.

Depreciation — usually the biggest one

The building (not the land) is deducted over 27.5 years, starting when it's ready for rent. On a $288,000 building basis that's about $10,473 a year. See rental property depreciation, explained or use the depreciation calculator.

Repairs vs. improvements

A repair (deducted now) keeps the property in working order. An improvement (depreciated over time) makes it better, restores it, or adapts it to a new use. Under the de minimis safe harbor, you can elect to deduct items costing $2,500 or less per invoice or item in the year you buy them, instead of depreciating them.

What you can't deduct

• Mortgage principal.
• Improvements as current expenses — they're depreciated instead.
• Your own labor.
• Personal costs mixed in with the rental's.
• A security deposit you plan to return (it isn't income, so it isn't an expense when you return it either).

When deductions exceed rent

A rental loss can often offset other income: If you actively participate in managing a rental (approving tenants, setting rent, approving repairs), you can usually deduct up to $25,000 a year of rental losses against other income. The allowance shrinks once modified adjusted gross income passes $100,000 and is gone at $150,000. Anything you can't use carries forward.

Make it easy next year

Keep every receipt by property as you go, run rent through a separate account, and total the year by Schedule E line in January. The Schedule E organizer sorts it in one sitting, and rental property records covers what to keep.

Sources: IRS Publication 527, IRS Publication 925, IRS Publication 946. General information, not tax advice.

Common questions

General information, not legal or tax advice. Where we state a law, we link the statute and re-check it on a schedule; your city or county can add rules of its own.