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An Owner’s Guide to Rental Property Tax Deductions

Central West End Rental Property Owner Doing Her TaxesOne of the best advantages of owning Central West End rental properties is that, come tax time, you can make the most of deductions that other taxpayers cannot. Yet, to benefit from these deductions, you need to determine what they are and how to have your numbers ready before you proceed with filling out your return. In this guide, we will examine the tax deductions that rental property owners can obtain and how they can help reduce your tax liability per year.

Common Expenses You Can Deduct

Establishing a strong comprehension of your property’s common expenses is vital to optimizing your cash flows. It can also assist you at tax time because you can deduct most of them on your return. Budget expenses that are also tax-deductible include:

  • Repairs and maintenance. Everything you give out to maintain the condition of your property is generally a deductible expense. This comprises fees paid to service providers, contractors, and so forth. Remember that improvements – mainly important ones – are not deductible as expenses. Instead, they need to be amortized as capital improvements.
  • Insurance. Insurance premiums for your landlord insurance policy, including any fire, flood, or personal liability insurance, are deductible expenses.
  • Utilities. You can deduct utility payments on your tax return if you spend on any utility service, including water, garbage, electric, or gas. Utilities paid by your tenants are not deductible.
  • Advertising. Any money you spend to market your property and/or find a new tenant is a deductible amount. This includes the cost of a web domain or website hosting, online ads, and professional fees for photography or video tours.

Additional Tax Deductions

On top of common expenses, there are a couple of other deductions that rental property owners may take to help reduce their tax liability. These tax deductions include:

  • Mortgage interest. Any mortgage interest you pay on related loans is tax-deductible for investment properties. This is often one of the most advantageous deductions for rental property owners.
  • Depreciation. Another wonderful deduction that rental property owners may obtain is depreciation. All properties are inclined to depreciate over time due to wear and tear. The good thing is that you can deduct a certain amount for this depreciation over the life of the property. You can also gain depreciation on capital improvements, such as appliances, fences, and renovations.
  • Legal and professional fees. Just like you can deduct expenses paid for repair work or landscaping, you can also deduct cash given to attorneys or other professionals who perform services related to the management of your rental property. The majority of costs associated with eviction, Central West End property management, and tax preparation are also deductible.
  • Travel. Owning rental properties commonly includes a lot of back-and-forth travel, whether you have your home in another state or only a few miles away. Those business-related miles may accumulate throughout the year and are deductible on your tax return. Just keep a log of your travel miles and any other travel-related expenses.

To take full advantage of all the deductions provided to you, you need to keep your property-related expenses organized and in one place. And there’s no need to wait until the end of each year; you can start keeping track of your expenses immediately and add as you go along. By doing these things, you can simplify your job each year when tax season comes around.


Another approach to make tax time more convenient is to engage with Real Property Management Specialist to keep track of your operational expenses. Other than professional property management, we will keep an eye on your property’s income and expenses and provide reports to make tax time much easier. Contact us online to learn more!

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