What can landlords deduct on taxes?
Quick answer
Landlords can deduct most ordinary and necessary costs of running a rental: mortgage interest, property taxes, insurance, repairs, maintenance, property management, utilities you pay, professional fees, travel, and depreciation. You subtract these from rent on Schedule E to reach your taxable income. Solid records and receipts are what make each write-off hold up if the IRS ever asks.
The largest deductions on most rentals
A handful of line items usually make up the bulk of a landlord's write-offs. These are the ones to get right first.
- Mortgage interest on loans used to buy or improve the property.
- Property taxes paid to your local government.
- Insurance premiums for landlord, hazard, and liability coverage.
- Depreciation, which spreads the building's cost across its useful life as set by the IRS.
Depreciation is a non-cash deduction, so many owners forget it, yet it often shelters a large share of rental income each year.
Operating expenses that add up
The day to day costs of keeping a unit rented are generally deductible in the year you pay them.
- Repairs and maintenance, from a leaky faucet to a routine service call.
- Property management fees and the software you run the business on.
- Utilities you cover rather than the tenant.
- Professional services, including legal, accounting, and tax preparation.
- Advertising to fill a vacancy and screening costs for applicants.
- Travel to the property for management, with mileage or actual costs logged.
Repairs versus improvements
This distinction trips up more landlords than any other. A repair keeps the property in working order and is generally deductible in full the year you pay it.
An improvement adds value or extends the property's life, like a new roof or a full kitchen remodel. Those costs are capitalized and depreciated over time instead of written off all at once.
Miscategorizing the two is a common audit flag, so document what each job actually was and keep the invoice on file.
How to protect every deduction
A deduction is only as good as the record behind it. If you cannot show what you spent and why, it may not survive review.
- Keep a dedicated bank account for the rental so personal spending never muddies the books.
- Save receipts and invoices, and note the property and purpose on each one.
- Categorize expenses as they happen rather than guessing months later.
State and local rules can shape what applies to you. Rules vary by state, so check the guides at /laws/ and run the specifics past your own tax advisor.
How Rentari helps
Rentari turns deduction tracking into a background task instead of an April marathon. Expense and Receipt Scanning reads each receipt and files it to the right category and property, and Bank Feed and Reconciliation matches spending against your accounts so nothing slips through.
Everything rolls into Auto-Accounting as a clean per-property ledger, and Tax-Ready Reporting lays it out in a Schedule E format your accountant can use directly. That way every deductible dollar is captured, categorized, and defensible.
Related questions
Can I deduct the value of my own labor?
Are repairs and improvements deducted the same way?
Can I write off travel to my rental property?
More landlord answers
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This article is general information for landlords, not legal, tax, or financial advice. Rules vary by state and city; verify specifics with the official statute or a licensed professional. See our state law guides.