Rental Property Tax Deductions for Landlords

What Landlords Can (and Can’t) Write Off

At Accolade Accounting, we work with real estate investors every day—and one thing is clear: the best tax strategy often starts with a consultation with a real estate tax accountant who understands how to align IRS rules with your investment goals.

Whether you’re managing a single-family rental or scaling a portfolio, knowing what’s deductible (and what’s not) can make a real difference at tax time.

What Rental Expenses Are Tax Deductible?

According to IRS Publication 527, landlords can deduct “ordinary and necessary” expenses for managing, conserving, and maintaining rental property. These are reported annually on Schedule E.

Common deductible expenses include:

Mortgage interest on loans used for purchase or improvements
State and local property taxes
Property insurance
Advertising for tenants
Utilities are paid by the landlord
Property management fees
Routine repairs and maintenance
Legal, accounting, and tax preparation fees

For a full breakdown, see our Real Estate Tax Services guide.

Deductible vs. Non-Deductible Rental Expenses

Expense	Deductible?	Notes
Mortgage interest	Yes	Must be tied to rental activity
Property taxes	Yes	Deduct in the year paid
Repairs (e.g. fixing a leak)	Yes	Must restore, not improve
Improvements (e.g. new roof)	No (capitalize)	Added to basis, depreciated
Utilities (landlord-paid)	Yes	Fully deductible if not reimbursed
Travel to manage property	Yes	Keep mileage or actual receipts
Commuting to rental from home	No	Considered personal travel
Legal fees for evictions	Yes	Must relate to rental income
Time spent managing the property	No	Personal labor is not deductible

Need help separating repairs from improvements? Visit our What Landlords Can Deduct (and What They Can’t) guide.

Depreciation Requirements

Residential rental buildings (not land) must be depreciated over 27.5 years using the MACRS system. Depreciation begins when the property is placed in service and must be tracked annually using IRS Form 4562. Even if depreciation was not claimed in prior years, the IRS requires it to be recaptured on sale.

Rental Income and Self-Employment Tax

Most rental income is considered passive and is not subject to self-employment tax. However, exceptions apply if you provide substantial services to tenants or qualify as a real estate dealer. See IRS Publication 925 for more details.

What to Prepare Before Filing

Good documentation is key to maximizing deductions and minimizing audit risk. Landlords should keep:

Receipts and invoices
Mileage logs for rental-related travel
Lease agreements and service contracts
A depreciation schedule
Separate bank accounts for rental activity

Download our Rental Property Tax Filing Checklist to stay organized.

Frequently Asked Questions for Landlords

What expenses can landlords deduct on their taxes?

Landlords can deduct ordinary and necessary expenses related to operating and maintaining rental property. This includes mortgage interest, property taxes, insurance, utilities (if paid by the landlord), maintenance, repairs, legal fees, and accounting services.

For a full breakdown, read our The Best Guide to Rental Property Tax Deductions for Landlords

Is painting considered a repair or an improvement?

Painting is generally classified as a repair if it restores the property to its original condition. In this case, the cost is fully deductible in the year it’s incurred. If it’s part of a larger improvement project, the cost may need to be capitalized and depreciated.

Do I need to depreciate my rental property each year?

Yes. The IRS requires landlords to depreciate residential rental buildings over 27.5 years using the MACRS method. This applies even if you didn’t claim depreciation—it must still be accounted for when you sell.

Is rental income subject to self-employment tax?

In most cases, no. Rental income is classified as passive income and is not subject to self-employment tax. Exceptions apply if you provide hotel-like services or are considered a real estate dealer.

What records should landlords keep for tax season?

You should retain receipts for all expenses, mileage logs for property-related travel, copies of leases, proof of payments, and a year-by-year depreciation schedule.

Use our Rental Property Tax Filing Checklist to stay organized.

Build Your Strategy with Expert Support

At Accolade Accounting, we support real estate investors across Atlanta and beyond. Whether you’re renting out one unit or managing a growing portfolio, we’ll help you:

Maximize your legal deductions
Track and apply depreciation accurately
Minimize audit risk
Plan ahead for long-term gains and exit strategies

Start with a consultation with a real estate tax accountant and build a plan that works just as hard as your property does.

When it comes to reliable accounting services in Atlanta, GA, look no further than Accolade Accounting. With a highly experienced accountant team, we have assisted numerous businesses in developing and implementing effective accounting systems. If you need expert guidance, don’t hesitate to contact our certified public accountants, call 470-646-2663

About the author

GIAN GORDON-WHYTE

Meet Gordon-Whyte, a seasoned tax professional with extensive expertise. As a Certified Public Accountant with a Master of Accounting, she's dedicated to simplifying taxation and financial matters.

Rental Property Tax Deductions