The Landlord's Guide to Rental Property Tax Deductions
Sarah Johnson
As a landlord, understanding tax deductions can significantly impact your bottom line. This comprehensive guide covers all the essential deductions you should be claiming on your rental properties.
Major Tax Deductions for Landlords
1. Mortgage Interest
The interest you pay on your rental property mortgage is fully deductible. This is often the largest deduction for landlords and can substantially reduce your taxable income.
2. Property Depreciation
You can depreciate the cost of your rental property (excluding land) over 27.5 years. This non-cash deduction can provide significant tax savings.
3. Repairs and Maintenance
All ordinary repairs and maintenance expenses are deductible in the year they occur:
- Plumbing repairs
- Painting
- Fixing broken windows
- HVAC maintenance
4. Property Management Fees
Whether you use a property management company or software like Roomazon, these fees are fully deductible.
5. Insurance Premiums
All insurance related to your rental property is deductible:
- Landlord insurance
- Liability insurance
- Flood insurance
Often Overlooked Deductions
- Travel expenses to and from your rental properties
- Home office expenses if you manage properties from home
- Legal and professional fees for evictions or lease preparation
- Advertising costs for finding tenants
- Utilities paid by the landlord
Record Keeping Tips
- Use dedicated accounts for rental income and expenses
- Save all receipts digitally using apps or software
- Track mileage for property-related travel
- Document all repairs with before/after photos
When to Consult a Tax Professional
While many deductions are straightforward, consider consulting a tax professional if you:
- Own multiple properties
- Have complex financing arrangements
- Are considering a 1031 exchange
- Want to maximize depreciation strategies
Proper tax planning can save thousands of dollars annually. Start organizing your deductions today to maximize your rental property returns!