Rental property tax deductions reduce the amount of income tax you pay on your rental income.

Most of your expenses on your rental properties can save you money, you shouldn’t ignore them. In fact, documenting your rental expenses and deductions should be a regular part of your rental business. If you don’t keep current records of your expenses you might consider a property management company or start tracking them today so you’re not scrambling at tax time to recreate those deductions.

Some of the deductions you could benefit from:

1. Interest on Your Rental Loans

You cannot deduct the amount of the loan (the principal); you can, however, deduct the interest on the loan that you pay in any given year.

Typically, as a rental owner, you’ll have some of these deductible interest expenses:

• Interest on loans to buy your rental property.
• Interest on loans to refinance your rental property.
• Personal loans for things related to the rental property.

2. Entertainment & Travel Expenses

If you have any travel expenses related to your rental property, such as transportation, lodging, and meals, they’re fully deductible. Also, if you use your personal vehicle in your rental property business, you can use one of two methods to deduct your related expenses: use the standard mileage rate or actual expenses. IRS Publication 463.

3. Maintenance & Repairs

A repair is any work that puts the property back in its original condition. Reasonable and necessary repair costs for your rental property are tax deductible. Maintenance doesn’t always involve fixing something that’s broken, but it gets to the idea of keeping the property in its original condition. Maintenance expenses that are deductible include:

• Landscaping
• Light bulbs, smoke detector batteries, HVAC filters, etc.
• Pest control
• Cleaning supplies

4. Depreciation

Depreciation is a process through which you deduct long-term assets (assets you hold for more than one year) over many years. Long-term assets include rental buildings. Land is not included. Tangible personal property that lasts for more than one year, such as carpeting and kitchen appliances, can also be depreciated. Because depreciation can be very complicated, it’s best to discuss it with your accountant.

5. Insurance

Insurance premiums, including those for landlord liability, theft, fire, and flood, are tax deductible.

6. Taxes

Real estate taxes, property taxes, and state, county and local sales taxes are deductible.

7. Home Office & Office Supplies

Many landlords don’t take advantage of the home office deduction, because quite frankly, it’s a bit of a pain AND the IRS tends to closely scrutinize this one. However, if you use an area of your home exclusively for your rental business, it might be worth exploring with your accountant. In addition to deducting for your home office, you can also deduct for office supplies used in carrying out your rental business. Deductible office supplies include writing implements, paper, notepads, printer ink, envelopes, and stamps.

8. Utilities

If you pay any utilities for your rental property, you can deduct them. These include:

• TV/Cable/Internet
• Electricity
• Gas
• Garbage/Recycling
• Water & Sewer

9. Professional Services

If you need to hire a lawyer, accountant, property management company or other professional, that cost is deductible and considered part of your operating expenses.

10. Advertising

Any money you spend on advertising your property for rent is deductible, whether it’s online, print, or radio.